European stocks drop further ahead of Greek talks

GMT 15:02 2015 Tuesday ,07 July

Arab Today, arab today European stocks drop further ahead of Greek talks

European stocks
London - AFP

Europe's main stock markets fell on Tuesday awaiting more high-level talks on the Greek crisis and following heavy losses the day before.

After rising at the open, indices turned red as the CAC 40 in Paris slid 1.40 percent to trade at 4,645.70 points in late afternoon deals.

Frankfurt's DAX 30 dropped 0.76 percent to 10,807.43 points and London's FTSE 100 index lost 0.36 percent to 6,512.39 points compared with Monday's close.

Stock indices had slumped on Monday, with Paris shedding 2.0 percent in value, after Greek voters rejected creditors' austerity demands in a weekend referendum, sparking new fears that it would crash out of the eurozone.

In foreign exchange on Tuesday, the euro fell to $1.0916 from $1.1057 late in New York on Monday.

"The euro is again sharply lower today (against the dollar) as investors await fresh news from Greece," said Fawad Razaqzada, technical analyst at trading site

"Any positive headlines regarding Greece leading up to a potential deal could support the euro," he added.

On Tuesday, eurozone leaders were to hold an emergency summit to discuss the fallout of the referendum that saw Greeks vote 'No' to austerity reforms demanded by Athens' creditors in return for bailout funds.

Late on Monday, the leaders of Germany and France, the eurozone's biggest economies, presented a united front, calling on Greek Prime Minister Alexis Tsipras to make "precise" proposals in order to revive bailout talks.

Britain is not part of the eurozone but counts the single currency bloc as its main trading partner.

Joshua Mahony, market analyst at IG trading group, said: "Unfortunately, while the Greeks are expected to present a new plan to help pull the Greek economy back from the brink, it is unlikely that Sunday's referendum will have swayed the creditors to the extent that their 'red lines' have moved enough to get a deal across the line.

"The two sides arguably seem further away than ever," he added.

European leaders have warned Tsipras to present new credible bailout proposals at the emergency summit or risk leaving the euro.

Earlier on Tuesday, Japanese and Australian stocks bounced back from the previous day's Greece-fuelled sell-off, but Shanghai and Hong Kong sank again as analysts warned Chinese measures to staunch a recent mainland rout will likely not be enough.

US stocks dropped as worries about a potential Greek exit from the eurozone and Chinese market frailty hit global markets.

About 30 minutes into trade, the Dow Jones Industrial Average was at 17,615.53, down 0.38 percent.

The broad-based S&P 500 fell 0.35 percent to 2,061.59, while the tech-rich Nasdaq Composite Index dropped 0.66 percent to 4,959.11.

Crude prices edged up after taking a hammering Monday on demand fears owing to the Greek crisis and China's struggles to stabilise its stock markets.

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