European stocks lose more ground on Greek woes

GMT 13:24 2015 Tuesday ,16 June

Arab Today, arab today European stocks lose more ground on Greek woes

European stocks
London - AFP

European stocks fell further Tuesday as Athens and its EU-IMF creditors remained locked in a stand-off over a deal to save Greece from a possible default, dealers said.

Markets also took a knock from news that investor sentiment has tumbled to a seven-year low in eurozone powerhouse Germany, weighed down by uncertainty over Greece and subdued global growth.

In late morning deals, London's FTSE 100 index slid 0.61 percent to 6,669.80 points and the CAC 40 in Paris lost 1.02 percent to 4,766.10 compared with Monday's close.

Frankfurt's DAX 30 sank 1.14 percent to 10,859 points as Germany's investor confidence index, calculated by the ZEW economic institute, fell 10.4 points to 31.5 points in June. That was its lowest level since November 2014.

"Equity markets are ... in the red across the board as the uncertainty surrounding Greece acts as a major drag on sentiment," said Oanda analyst Craig Erlam.

"The ZEW economic sentiment figures... highlighted this," he added.

In crisis-hit Greece, the ATHEX index fell 0.77 percent to 732.83 points, having slumped almost 5.0 percent on Monday in a global selloff after talks with creditors collapsed over the weekend.

"The Greek government continues to remain stubborn, despite calls by European officials for it to make further reforms before creditors release further bailout funds," said dealer Amir Khan at trading firm Currencies Direct.

"Greece has to pay 1.6 billion euros ($1.8 billion) to the International Monetary Fund by 30 June, so without the bailout funds the risk of a default looms large. If Greece does default, it would have to leave the eurozone."

- Athens compromise? -

Greece still has "two or three gestures" it can make to break a deadlock with the country's creditors that could lead to a disastrous default, Prime Minister Alexis Tsipras reportedly told an opposition leader as he sought to muster support at home for a compromise deal.

The radical left government in Athens is resisting calls from the international creditors to increase taxes and reform pensions, arguing that such measures have already failed to revive the recession-hit Greek economy.

Greece's EU-IMF bailout expires on June 30, and it had been hoped that a deal could be reached by Thursday when the eurozone's 19 finance ministers, who control the purse strings of the rescue programme, meet in Luxembourg.

Sources in Brussels said European leaders are considering holding an emergency summit on Greece this weekend but any decision will depend on the outcome of the Luxembourg meeting.

Greece faces a 1.6 billion euro payment to the IMF at the end of this month, plus another 6.7 billion euros due to the European Central Bank in July and August, which Greek officials have said the government cannot afford.

In foreign exchange deals on Tuesday, the European single currency fell to $1.1260 from $1.1285 late on Monday in New York.

Elsewhere Tuesday, travel group Thomas Cook saw its share price slide 2.86 percent to 135.70 pence on London's second tier FTSE 250 index, which was 0.51 percent lower.

Thomas Cook shares had risen 0.57 percent on Monday after it announced a joint venture selling holidays under its name in the world's second biggest economy.

The agreement will see domestic, inbound and outbound holidays sold in China through a business that will be 51 percent owned by privately owned Chinese conglomerate Fosun International, with Thomas Cook owning the remainder.

Fosun bought a 5.0 percent stake in Thomas Cook earlier this year.


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