European stocks slide over slow progress in Greece talks

GMT 12:45 2015 Thursday ,04 June

Arab Today, arab today European stocks slide over slow progress in Greece talks

CAC 40 in Paris shed
London - AFP

European stock markets slumped Thursday over a lack of progress in negotiations between Greece and its creditors, as talks continue on the eve of a loan repayment due by Athens.

In midday deals, Frankfurt's DAX 30 index slid 1.52 percent to 11,246.00 points and the CAC 40 in Paris shed 1.98 percent to 4,934.48 .

Greece's main index dived 2.17 percent to 820.06 points compared with Wednesday's close.

Outside of the eurozone, London's benchmark FTSE 100 dropped 1.50 percent to 6,846.28 points, with investors awaiting the latest interest rate decision from the Bank of England due Thursday.

"Greece’s day of reckoning is nearly upon us and traders can't get out of the market fast enough," said David Madden, market analyst at IG trading group.           

"We are back to the bad old days of the eurozone debt crisis, when equity markets around Europe are selling off hard and fast."

Greece and the EU on Thursday said debt talks would continue to reach a deal on disputed reforms as Athens began to feel the heat of a wave of June debt repayments.

With more than 300 million euros  ($336 million) due to be repaid to the IMF on Friday, the radical left Greek government was under mounting pressure to reach a default-saving agreement with its creditors.

The Athens stock exchange on Thursday opened with a three-percent drop after Greece and its creditors failed to reach a breakthrough at crunch talks in Brussels late on Wednesday.

With an IMF repayment looming and limited data "not only in the eurozone but the rest of the Western markets as well, it could be a choppy, Greek-filled day for the global indices," said Spreadex financial analyst Connor Campbell.

The euro was however higher, bolstered by the European Central Bank's upbeat inflation forecasts according to traders.

The European single currency rose to $1.1350 from $1.1270 late in New York on Wednesday.

After a policy meeting Wednesday, the ECB kept its key interest rates unchanged at record lows and its president Mario Draghi said it would maintain its bond-buying stimulus programme, putting an end to talk it could be wound down early.

The ECB also projected eurozone inflation would reach 0.3 percent in 2015, up from its previous forecast of flat prices, while it kept its 2016 forecast at 1.5 percent and its 2017 forecast at 1.8 percent.

In Asia on Thursday, Shanghai stocks recovered from a huge plunge to end higher while Tokyo's early gains wilted to almost nothing.

Shanghai slumped 5.2 percent at one point after a brokerage imposed restrictions on margin borrowing, limiting a crucial avenue of cash.

"China’s economy is too dependent on credit and it feels like the pressure cooker is about to blow," said analyst Madden.

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