You are here
Europe: Stocks pause for Greek developments
[LONDON] European stock markets marked time on Tuesday, waiting to see whether Prime Minister Alexis Tsipras wins domestic support for draconian reforms needed to secure a bailout and the EU finds short-financing to keep Greece from defaulting.
Frankfurt's benchmark DAX 30 index of top companies rose 0.28 per cent to 11,516.90 points, despite disappointing data.
In Paris, the CAC 40 climbed 0.69 per cent to 5,032.47 in light conditions with many traders absent for the Bastille Day public holiday.
Outside the eurozone, London's FTSE 100 index added 0.23 per cent to 6,753.75 points.
"European stocks treaded water on Tuesday as remaining concerns over the implementation Greece's bailout agreement and tepid economic data took the edge off optimism that had been built up since signs of a deal in Greece first emerged last week," said CMC Markets UK analyst Jasper Lawler.
European equities had raced higher Monday on relief over Greece's long-awaited bailout agreement with its international creditors.
"There was not much euphoric celebration of the deal to extend new loans to Greece in return for more austerity and heavily-supervised privatisation," said strategist Kit Juckes at French bank Societe Generale.
"But the hangover is in evidence. Mr Tsipras' Syriza government may see significant rebellion and approval of the deal in the Greek parliament will probably only be possible with the help of opposition parties - and even then, it is not completely certain it will pass." Tsipras is facing resistance from some members of his Syriza party, which shot to power in January on the back of promises to end five years of bitter austerity, and are reluctant to approve on Wednesday the tax and pension measures to unlock the bailout funds.
Meanwhile in Brussels, European nations were having trouble agreeing on how to provide short-term funding to Greece to prevent its default and exit the euro while the details of the bailout are decided.
"Fears of a Grexit" are "back on the minds of investors", said Augustin Eden, research analyst at trading firm Accendo Markets.
In foreign exchange deals, the European single currency edged up to US$1.1014 from US$1.1004 late in New York on Monday.
The euro had jumped to a July peak at US$1.1216 on Monday shortly after the deal was announced, but then slid as traders realised a Greek deal bolstered chances that the US Federal Reserve will hike interest rates soon.
The German stock market spent most of the day in the red after having taken another knock from weak data.
Investor sentiment in Germany fell in July to its lowest level in eight months, but the outlook for Europe's biggest economy remains positive, a survey found.
The investor confidence index calculated by the ZEW economic institute slipped by just 1.8 points to 29.7 points in July, its lowest level since November 2014, ZEW said in a statement.
Analysts had however been expecting a slightly steeper decline this month to 29.0 points.
"Neither the difficulties in dealing with the Greek sovereign debt crisis nor the turmoil on Chinese financial markets seem to impress the financial market experts strongly," said ZEW president Clemens Fuest.
"Despite the slight decline of the indicator, the overall economic outlook for Germany remains positive," he said.
Most Asian markets climbed on Tuesday, as a Greek relief rally continued.
Tokyo climbed 1.47 per cent, gaining extra fuel as the yen retreated against a resurgent dollar. Sydney jumped 1.90 per cent, Jakarta climbed 0.40 per cent and Bangkok added 0.17 per cent.
But Shanghai fell 1.16 per cent and Hong Kong pulled back 0.41 per cent after climbing more than seven per cent from Thursday.
Seoul ended 0.11 per cent lower.
Wall Street pushed higher Tuesday, helped by reports of a possible US$23 billion acquisition of chipmaker Micron by Chinese investors.
In midday trading, the Dow Jones Industrial Average was up 0.30 per cent to 18,031.40 points.
The broad-based S&P 500 rose 0.40 per cent to 2,107.94, and the tech-rich Nasdaq Composite Index climbed 0.70 per cent to 5,106.89.