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Europe: Paris and Madrid stock markets close lower


[PARIS] The Paris Bourse closed lower on Monday in a low-key session, with many markets around Europe and in New York closed for public holidays.

Paris' leading CAC 40 index ended the day 0.50 per cent down at 5,100 points compared with Friday's close, with extremely low volumes worth less than 700 million euros (US$768 million) traded.

Most of Europe's major markets - including London and Frankfurt - remained closed during the Monday holiday, with Wall Street similarly taking Memorial Day off.

Madrid's stock market was open for business, the day after voters in municipal and regional elections abandoned traditional parties to back populist protest rivals, with the Ibex-35 index closing 2.01 per cent lower at 11,322.30 points.

The CAC 40 a lost ground due to "the combination of a holiday and an empty economic calendar," said Christopher Dembik, economist at Saxo Banque.

But though Renta 4 analyst Angel Perez told AFP that in Spain investors had reacted cooly to anti-austerity parties topping polls in Barcelona and possibly taking power in Madrid, the real reason behind Monday's dip were hardening negotiations between Greece and its creditors over 7.2 billion euros in blocked bailout aid.

Cash-strapped Athens is resisting austerity and reform demands from creditors to free up the money, which Greece needs to finance a series of debt repayments to the International Monetary Fund - and thus avoid possible default that could drive the country from the euro.

"Today's fall was above all due to the situation in Greece, which may not be able to honour its payments to the IMF, and is making the market a bit nervous," said Mr Perez, who acknowledged the spectre of major political change following Sunday's elections "may create uncertainty in Spain for the short-term." Earlier in the day Asian markets closed higher, with Tokyo boosted by a weaker yen after the US Federal Reserve chief stuck to her plan to raise interest rates by year-end.

Tokyo closed 0.74 per cent higher, adding 149.36 points to reach a 15-year high of 20,413.77, while Sydney jumped one per cent, or 56.8 points, to 5,721.5.

Shanghai surged 3.35 per cent, or 156.20 points, to 4,813.80 as traders moved into undervalued stocks.

Hong Kong and Seoul were closed for public holidays.