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Europe: Stocks fall to two-week low amid Greece debt standoff
[LONDON] European stocks fell for the third time in four days as investors speculated whether Greece will reach an agreement with creditors before it runs out of time and money.
The Stoxx Europe 600 Index declined 1 per cent to 396.45 at the close of trading, after losing as much as 1.3 per cent. The ASE Index dropped 2.5 per cent to the lowest level in almost a month, as Greek markets reopened after a holiday.
Greece's prime minister said his government submitted a new plan aimed at ending a stalemate, just as creditors met to finalize theirs. European leaders and the head of the International Monetary Fund gathered last night in Berlin to work out ways to avert a Greek default. The country owes four payments to the IMF this month, and its aid package backed by the euro region expires at the end of June.
"Clearly there's still a lot of negotiations to go," said Ben Kumar, who helps oversee about US$12 billion at Seven Investment Management in London. "Central-bank action is already factored in, as are corporate earnings. That leaves Greece as the one thing to look at right now. We see headlines everyday saying this is getting serious. Eventually, people get bored. They've been hearing it for months."
Shares resumed declines after halting a two-day drop on Monday. Exporters tumbled as the euro strengthened, with carmakers falling 1.4 per cent as a group. Volkswagen AG and Daimler AG declined more than 1.5 per cent, pushing Germany's DAX Index down 0.9 per cent for one of the worst performances among western-European markets.
Aryzta, Pernod Among stocks active on corporate news, Aryzta AG slid 9.2 per cent after posting revenue that missed analysts' estimates. Pernod Ricard SA lost 4.9 per cent after forecasting a slow recovery in pricing and saying gross margins are still under pressure.
Elekta AB plunged 9.6 per cent after reporting worse-than- projected annual earnings and saying sales will continue to decline in the first half of the next year.
LVMH Moet Hennessy Louis Vuitton SE climbed 1.2 per cent after HSBC Holdings Plc recommended buying the shares, forecasting faster sales growth in the luxury-goods industry. Wolseley Plc gained 2 per cent after reporting an increase in quarterly same-store sales.