European stocks drop at open

GMT 12:30 2015 Thursday ,20 August

Arab Today, arab today European stocks drop at open

London's benchmark FTSE 100 index
London - AFP

European stock markets fell at the open Thursday as traders reacted to sliding oil prices, China's economic problems, the outlook for US interest rates and Greek action over its bailout.

London's benchmark FTSE 100 index dropped 0.55 percent to 6,368.40 points compared with Wednesday's close.

Frankfurt's DAX 30 shed 0.83 percent to 10,593.28 points and the CAC 40 in Paris lost 0.34 percent to open at 4,867.45.

"With Greece receiving the first 26 billion-euros slice of its 86 billion-euros bailout this morning, just in time to pay the ECB, there should be a sense of euphoria on the markets," said Connor Campbell, analyst at Spreadex trading group, of a 3.4 billion euro ($3.8 billion) loan payment made Athens to the European Central Bank Thursday.

"Instead continued concerns over China have sent the European indices to seven month lows."

Asian markets provided a negative lead, slumping Thursday on heightened concerns about the health of China's economy after Federal Reserve minutes from its last policy meeting clouded the outlook for US interest rates.

China's benchmark Shanghai stock index meanwhile closed down 3.42 percent on Thursday, as worries persisted over the country's weak economy and currency, dealers said.

On currency markets, the dollar had tumbled Wednesday as the Fed dampened expectations for a rate rise in September and outlined its fears about the global economy, sending oil prices tumbling.

The minutes "did not shed much more in the way of solid news on the timing of the first rate hike which now might be complicated by Chinese developments and increasing market volatility," said Neil MacKinnon, economist at VTB Capital.

Dealers said markets remained pressured by uncertainties over China after the shock devaluation of the yuan last week added to fears that growth in the world's second biggest economy is slowing more than thought.

In Europe on Thursday, a source close to the Greek government confirmed that Athens had made its payment due to the ECB.

The payment was unlocked after European parliaments, including Germany's Bundestag, gave the green light to a third bailout package for Greece's stricken economy.

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