Europe: Stocks fall at open

[LONDON] European stock markets fell at the start of trading on Tuesday as Greece reached a deal over a third bailout and after China devalued the yuan to boost its economy.

London's benchmark FTSE 100 index dropped 0.41 per cent to 6,708.80 points compared with Monday's close.

Frankfurt's DAX 30 slipped 0.49 per cent to 11,548.00 points and the CAC 40 in Paris lost 0.22 per cent to stand at 5,184.21.

Greece has reached a deal on a multi-billion bailout with its international creditors after marathon talks, a government source said Tuesday.

"An agreement was reached," the source told AFP, with Finance Minister Euclid Tsakalotos briefly telling reporters that "one or two details" remained to be worked out during the day.

The talks between ministers and the ECB, the International Monetary Fund and the European Stability Mechanism aim to finalise the list of new reforms required of the Greek government in exchange for a lifeline of up to 86 billion euros (S$131 billion).

The deadline for Greece to reach an agreement on its third bailout is August 20, when it must repay 3.4 billion euros to the European Central Bank.

Elsewhere, Asian stock markets were mixed on Tuesday with Shanghai and Hong Kong boosted by news that China's central bank is devaluing its currency while other regional markets fell.

China on Tuesday announced a sharply lower daily reference rate for the yuan against the US dollar, saying it was part of moves to make its exchange rate regime more market-oriented.

The 1.86 per cent cut was the largest since the yuan was unpegged from the greenback in 2005.

Weak trade and inflation data released last weekend reinforced concerns that growth is slowing in the world's second largest economy.

AFP