Europe: Top stock markets shrug off Greek plunge

[LONDON] Europe's main stock markets mostly rose on Monday, appearing to shrug off a plunge in Athens as Greek trading resumed after a five-week shutdown.

In the eurozone, the CAC 40 in Paris rose 0.75 per cent to end the day at 5,120.52 points, while Frankfurt's DAX 30 gained 1.19 per cent to close at 11,443.72 points.

London's benchmark FTSE 100 index however slipped 0.11 per cent to finish at 6,688.62 points, with its heavyweight oil and mining sectors hit by more disappointing Chinese data, traders said.

In foreign exchange, the euro eased to $1.0967 from $1.0984 late in New York on Friday.

Greece's stock exchange reopened Monday with a drop of more than 22 per cent after a five-week shutdown imposed by capital controls in the country's debt crisis.

The ATHEX index ended the day down 16.23 per cent, its biggest ever drop, to stand at 668.06 points, its worst decline in nearly 30 years.

"The sharp fall in the Athens Stock Exchange on Monday came as little surprise given the huge amount of turmoil in Greece since the market was last open five weeks ago. And it is difficult to make the case for any significant rebound in the months ahead," said analyst David Rees at research firm Capital Economics.

"Moreover, news that the Greek manufacturing PMI fell to just 30.2 in July - its lowest ever reading - supports our view that the economy will continue to struggle," Rees added.

Greece's main banks took a heavy blow on Monday, with National Bank and Piraeus falling to the maximum allowed level of minus 30 per cent.

In London, shares in HSBC gained 0.28 per cent to close at 581.30 pence after the British banking giant announced the sale of its Brazil business. HSBC also posted a drop in quarterly net profits.

More data showing softness in the Chinese economy hit mining shares on Monday.

Glencore led the losers' board, shedding 3.68 per cent to finish at 200.35 pence, followed closely behind by peer Anglo American - down 3.97 per cent at 779 pence.

"Greece and China are back at the top of the news agenda, with the latter hitting UK mining stocks hard," said Chris Beauchamp, senior market analyst at IG trading group.

"Having seen a modest bounce last week the mining sector has taken a distinct turn for the worse today, with big names under heavy pressure," he said.

Asian stock markets mostly fell Monday following the disappointing Chinese manufacturing figures and a drop on Wall Street on Friday.

The survey of Chinese manufacturing activity showed a decline to a two-year low in July, suggesting the world's second largest economy faces challenges in the third quarter.

On Monday Wall Street stocks were mixed as a heavy week of US economic reports and earnings kicked off with data showing a slight rise in consumer spending in June.

In New York mid-day trading, the Dow Jones Industrial Average was down 0.67 per cent at 17,610.89 points.

The broad-based S&P 500 slipped 0.06 per cent to stand at 2,102.58, while the tech-rich Nasdaq Composite Index was up 0.10 per cent to 5,133.60.

AFP