European stocks dip as Greek doubts emerge

GMT 14:21 2015 Tuesday ,14 July

Arab Today, arab today European stocks dip as Greek doubts emerge

European equities retreat
London - AFP

Europe's main stock markets fell back Tuesday on doubts over Greece's latest bailout, as Prime Minister Alexis Tsipras struggled to win domestic support for draconian reforms attached to the deal.

Frankfurt's benchmark DAX 30 index of top companies shed 0.48 percent to 11,428.88 points in afternoon deals, dented also by disappointing data.

In Paris, the CAC 40 slid 0.09 percent to 4,9993.61 in light trading conditions with many traders absent for the Bastille Day public holiday, but markets remained open.

Outside the eurozone, London's FTSE 100 index gave up 0.21 percent, compared with Monday's close, to 6,723.88 points.

European equities had raced higher Monday on relief over Greece's long-awaited bailout agreement with its international creditors.

Tsipras held meetings with his radical leftist Syriza party on Tuesday, as he faced the tough task of selling a new bailout deal that requires Athens to push through draconian reforms within just two days.

- Greek hangover 'in evidence' -

"There was not much euphoric celebration of the deal to extend new loans to Greece in return for more austerity and heavily-supervised privatisation," said strategist Kit Juckes at French bank Societe Generale.

"But the hangover is in evidence. Mr Tsipras’ Syriza government may see significant rebellion and approval of the deal in the Greek parliament will probably only be possible with the help of opposition parties -- and even then, it is not completely certain it will pass."

Tsipras needs to secure backing for the deal from the Greek people, parliament and Syriza, which shot to power in January on the back of promises to end five years of bitter austerity under two previous bailouts.

In the agreement struck Monday with the eurozone to prevent Greece crashing out of the euro, Athens must pass sweeping changes to labour laws, pensions, VAT and taxes by Wednesday.

“Equity markets largely in the red... coming down off yesterday's heady reaction to news of a Greek deal, as Alexis Tsipras returns to a revolution within his Syriza party," said Augustin Eden, research analyst at trading firm Accendo Markets.

He added that "fears of a Grexit" are "back on the minds of investors".

In foreign exchange deals, the European single currency firmed to $1.1064 from $1.1004 late in New York on Monday.

The euro had jumped to a July peak at $1.1216 on Monday shortly after the deal was announced, but then slid as traders realised a Greek deal bolstered chances that the US Federal Reserve will hike interest rates soon.
- German investor sentiment sinks -

The German stock market meanwhile took another knock from weak data.

Investor sentiment in Germany fell in July to its lowest level in eight months, but the outlook for Europe's biggest economy remains positive, a survey found.

The investor confidence index calculated by the ZEW economic institute slipped by just 1.8 points to 29.7 points in July, its lowest level since November 2014, ZEW said in a statement.

Analysts had however been expecting a slightly steeper decline this month to 29.0 points.

"Neither the difficulties in dealing with the Greek sovereign debt crisis nor the turmoil on Chinese financial markets seem to impress the financial market experts strongly," said ZEW president Clemens Fuest.

"Despite the slight decline of the indicator, the overall economic outlook for Germany remains positive," he said.

- US opens flat -

Most Asian markets climbed on Tuesday, as a Greek relief rally continued.

Tokyo climbed 1.47 percent, gaining extra fuel as the yen retreated against a resurgent dollar. Sydney jumped 1.90 percent, Jakarta climbed 0.40 percent and Bangkok added 0.17 percent.

But Shanghai fell 1.16 percent and Hong Kong pulled back 0.41 percent after climbing more than seven percent from Thursday.

Seoul ended 0.11 percent lower.

Wall Street stocks opened little changed Tuesday following a drop in US retail sales and mixed earnings from banks.

Five minutes into trade, the Dow Jones Industrial Average was at down 0.06 percent to 17,966.19 points.

The broad-based S&P 500 was essentially flat at 2,099.68, while the tech-rich Nasdaq Composite Index added 0.13 percent at 5,078.12.

US retail sales fell 0.3 percent in June as consumers pulled back spending in a broad array of areas, including auto purchases, the Commerce Department reported.

JPMorgan Chase climbed 0.6 percent after second-quarter earnings rose 5.2 percent to $6.3 billion. Wells Fargo advanced 0.1 percent on flat earnings of $5.7 billion.

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