European stock markets slip awaiting Greek vote

GMT 10:16 2015 Friday ,03 July

Arab Today, arab today European stock markets slip awaiting Greek vote

European stock
London - AFP

Europe's main stock markets slipped on Friday with all eyes on Greece's weekend referendum on its bailout and future place in the eurozone.

In late morning deals, Frankfurt's DAX 30 index lost 0.10 percent to stand at 11,088.73 points and in Paris the CAC 40 shed 0.21 percent to 4,825.18 amid fears of a "Grexit" or Greece exit from the single currency bloc.

Outside the eurozone, London's benchmark FTSE 100 index dipped 0.15 percent to 6,620.20 compared with Thursday's close.

In foreign exchange, the euro advanced to $1.1114 from $1.1086 late in New York on Thursday.

"All eyes are on the Greek referendum on Sunday," said VTB Capital economist Neil MacKinnon with US markets shut Friday ahead of the July 4 Independence Day celebrations.

"The vote seems tight. A No vote increases the chances of a Grexit as the ECB would pull the plug on the Greek banks," he said.

"A Yes vote results in the resignation of the Greek government though it is not clear that this would necessarily result in a more creditor-compliant Greek administration that would sign up to the creditors' proposals quickly."

European stocks dipped Thursday after a volatile week shaped by Greece's continued stand-off with its creditors.

After starting the week with large gains fuelled by hopes debt-swamped Greece might conclude a bailout agreement with creditors -- the European Union, International Monetary Fund and European Central Bank -- investor alarm spiked as talks broke down, Athens missed a repayment deadline and Greek Prime Minister Alexis Tsipras called the referendum.

The euro meanwhile dropped below $1.10 earlier in the week before firming.

"With the vote so close to call, we should of course expect a big euro/dollar move  on Monday," said Derek Halpenny, European head of markets research at Bank of Tokyo-Mitsubishi.

"However, a 'Yes' victory that lifts the euro may not last long," he added.

Although Greek leaders insist the plebiscite focuses narrowly on tough austerity conditions attached to a bailout that expired on Tuesday, EU leaders say it is a vote on whether Greece wants to remain in the euro.

-- Calm before storm? --

Connor Campbell, analyst at Spreadex trading group, said that even if the IMF implicitly blamed Tsipras' "Syriza party for the economic deterioration in Greece since it came into power, the Washington-based institution stated that the country needs an extra 60 billion-euros relief program alongside debt relief in any new deal and a 20 year grace period for any repayments."

Awaiting the outcome of Sunday's crucial vote, European markets appeared to largely watch and wait Friday.

"So close to a potential Grexit decision, we can sniff no whiff of panic across Europe," said Holger Schmieding, chief economist at Berenberg Bank.

"For the Eurozone economy and its markets, Grexit would be manageable."

Asian markets finished Friday mostly down, with Seoul dropping 0.14 percent, Sydney sliding 1.1 percent and Shanghai plunging 5.77 percent to end a turbulent week

Tokyo shrugged off early losses to finish the day slightly higher, with the Nikkei 225 index nudging ahead.

Wall Street closed down Thursday following a mixed report on jobs creation.


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