European stocks slide on Greek anti-austerity vow

GMT 14:41 2015 Monday ,09 February

Arab Today, arab today European stocks slide on Greek anti-austerity vow

European stock markets
London - AFP

European stock markets sank Monday after Greek Prime Minister Alexis Tsipras vowed to stand by his anti-austerity electoral promises, fanning fresh fears over the nation's potential exit from the eurozone.
In late morning deals, London's FTSE 100 index dipped 0.73 percent to 6,803.30 points, with HSBC shares sliding on claims that its Swiss banking division had helped rich clients dodge tax.
Elsewhere, Frankfurt's DAX 30 index shed 1.64 percent to 10,668 points and in Paris the CAC 40 reversed 1.15 percent to 4,636.90 compared with Friday's close.
In foreign exchange activity, the euro firmed to $1.1335 from $1.1316 late in New York on Friday.
"European equities are trading sharply lower ... as a speech by Tsipras over the weekend is putting pressure on stocks," said analyst Markus Huber at brokerage Peregrine and Black.
"Tsipras clearly indicated that he won’t be going back on any of his election campaign promises regarding reversing austerity measures.
"With an emergency meeting concerning the situation in Greece by the eurozone only two days away, chances appear rather slim for a compromise, which heightens the risk of a possible Greek default and exit out of the euro in just a few months from now."
- Athens market plummets -
The Athens stock market slumped by more than six percent as investors feared that Greece's refusal to apply for a bailout extension would set it on a path that could end with it exiting the eurozone.
Greece was locked Monday in intense talks with its EU partners after the country's prime minister stuck to his anti-austerity guns with the deadline for a deal needed to avoid the risk of default and a euro exit just days away.
In a rousing speech to parliament, Tsipras on Sunday pledged he would be "unshakeable" in implementing his electoral promises and refused to apply for an extension to the much-loathed 240 billion euro ($270 billion) bailout.
The European Commission's representative for the EU-IMF-ECB troika and head of the Euro Working Group were in Athens for talks with the finance ministry in a bid to thrash out a last-minute deal ahead of the emergency meeting of eurozone finance ministers on Wednesday.
Athens is expected to push for a new debt deal with its international creditors, something its EU partners have so far resisted, and its determination to rip up the 2010 reforms-for-loans programme has sparked fears the country could default.
Back in London, HSBC bank shares dropped 1.56 percent to 611.10 pence on claims Monday that its Swiss division helped wealthy customers dodge millions of dollars in taxes after a "SwissLeaks" cache of secret files emerged online.
The documents, published over the weekend, claim the bank helped clients in more than 200 countries evade taxes on accounts containing $119 billion (104 billion euros).
HSBC's Swiss banking arm insisted it has since undergone a "radical transformation" to prevent its services being used to evade taxes or launder money.
The huge cache of files stolen by an IT worker in 2007 and passed to French authorities has sparked criminal probes in several countries and attempts to claw back cash.
- Chinese gloom -
Meanwhile on Monday, investor sentiment was also hurt by poor Chinese economic data, which fanned worries over the faltering Asian powerhouse.
China on Sunday said exports fell 3.2 percent year-on-year in January. Imports plunged 19.7 percent -- the largest drop in five years -- owing to lower commodity prices and sluggish domestic demand.
The figures are the latest illustration of China's slowing economy, which in 2014 expanded at its slowest rate in 24 years.
But the poor Chinese trade figures lifted shares in Shanghai on hopes that Beijing will introduce renewed easing measures.
However, most other Asian markets fell Monday as a strong US jobs report fuelled expectations that the Federal Reserve will bring forward an interest rate rise.
Investors are tracking the US Fed after a better-than-expected jobs report on Friday increased the chances of an early rate hike.
"Data from China showed a worrisome slump in imports and exports, which has continued to stoke the fears of a slowdown in the world’s second largest economy," said dealer Jonathan Sudaria at London Capital Group.
"The tension in Greece also continues to ratchet up."


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