Europe: Stocks rebound slightly despite Greek woes

[LONDON] Europe's main markets rebounded slightly on Tuesday despite Athens and its EU-IMF creditors remaining locked in a stand-off over a deal to save Greece from a possible default.

The CAC 40 in Paris ended the day up 0.51 percent at 4,839.86 points, and Frankfurt's DAX 30 rose 0.54 percent to close at 11,044.01 points.

London's benchmark FTSE 100 index of top companies was essentially unchanged, down 0.01 per cent at 6,710.10 points.

"The market has calmed down and halted the downward slide," said Andrea Tueni, an analyst at Saxo Banque.

"The news on Greece has been rather contradictory, even if some messages seem reassuring, especially on the European side," he said.

Sources in Brussels said European leaders are considering holding an emergency summit on Greece this weekend but any decision will depend on the outcome of a meeting of the Eurogroup finance ministers on Thursday in Luxembourg.

But in Athens, Prime Minister Alexis Tsipras had harsh words for Greece's creditors, saying they were trying to "humiliate" the country and that Europe should reconsider its support for the tough reform measures demanded by the International Monetary Fund.

"The time has come for the IMF's proposals to be judged in public... by Europe," Mr Tsipras told Greek lawmakers on Tuesday, adding that the global lender bore "criminal responsibility" for austerity measures that plunged the country into a six-year recession.

The tensions sent Athens stocks Tuesday tumbling 4.77 per cent to close at 703.05. after losing nearly five per cent the day before.

"The Greek government continues to remain stubborn, despite calls by European officials for it to make further reforms before creditors release further bailout funds," said dealer Amir Khan at trading firm Currencies Direct.

"Greece has to pay 1.6 billion euros (S$2.41 billion) to the International Monetary Fund by 30 June, so without the bailout funds the risk of a default looms large. If Greece does default, it would have to leave the eurozone."

In foreign exchange deals on Tuesday, the European single currency fell to US$1.1230 from US$1.1285 late on Monday in New York.

WAITING FOR FED RATE SIGNALS

Elsewhere Tuesday, travel group Thomas Cook saw its share price slide 1.13 per cent to close at 138.12 pence on London's second tier FTSE 250 index.

Thomas Cook shares had risen 0.57 per cent on Monday after it announced a joint venture selling holidays under its name in the world's second biggest economy.

The agreement will see domestic, inbound and outbound holidays sold in China through a business that will be 51 per cent owned by privately owned Chinese conglomerate Fosun International, with Thomas Cook owning the remainder.

Wall Street stocks were higher Tuesday ahead of a two-day Federal Reserve meeting expected to shed light on the US central bank's timing to raise interest rates.

At mid-day in New York, the Dow Jones Industrial Average was up 0.50 per cent to 17,880.95 points.

The broad-based S&P 500 rose 0.33 per cent to 2,091.35, while the tech-rich Nasdaq Composite Index gained 0.24 per cent to 5,042.26.

Better jobs and retail sales data have altered the outlook somewhat for US monetary policy after a weak first quarter. Although the Fed is not expected to lift interest rates Wednesday, Fed Chair Janet Yellen could signal a move is near.

Data Tuesday showed new construction of homes in the United States slowed in May but there was a surge in building permits, suggesting the housing market continues to gain strength.

Asian stocks retreated for a second straight day, with Shanghai tumbling 3.47 per cent on liquidity concerns as 25 firms launch initial public offerings, which drain funds from the market.

Tokyo shed 0.64 per cent and Hong Kong ended 1.10 per cent lower.

AFP