Traders work at the Frankfurt Stock Exchange. The DAX 30 dropped 1.03% at 11,692.90 points yesterday.
AFP/London
The euro slid yesterday and European stock markets closed lower on concerns over Greece’s ability to meet looming repayment deadlines, dealers said.
London’s benchmark FTSE 100 index ended the day 1.18% lower at 6,948.99 points, while Frankfurt’s DAX 30 dropped 1.03% to 11,692.90 compared with Friday’s closing levels. Both markets were shut Monday.
In Paris the CAC 40 shed 0.66% to end the day at 5,083.54 points compared to its close on Monday, when it lost 0.50% in value.
Meanwhile the euro slid to $1.0902, down from $1.0980 late Monday.
“Political turbulence in southern Europe was driving risk-averse sentiment in European stock markets,” said Jasper Lawler, a market analyst with CMC Markets UK, who noted that a “softer euro, which has typically been a driver of equity gains, since it helps exporters, was no consolation.”
Analysts said the declines were primarily rooted in concerns over rising tension between Greece and its international creditors to seeking a deal to free up €7.2bn in frozen bailout funds that Athens desperately needs to honour heavy debt payments in June—and thereby avoid default that might force its chaotic exit from the euro.
“The euro continued to fall Tuesday with many blaming Yanis Varoufakis after the Greek finance minister pointed the finger at the country’s creditors on Monday, claiming that their wish to impose further austerity on Greece as the cause of the stalemate,” said Spreadex analyst Connor Campbell, adding that “the eurozone’s trademark volatility (that) roared back with a vengeance.”
Campbell said investors were unsettled by rumours that Greece may lump the series of looming debt payments together to ratchet up its game of chicken with its creditors—increasing uncertainty and fears of “a Greek default (that) continues to severely harm the eurozone.”
Lawler’s read, however, was rather more dire.
“Market reaction on Tuesday is more consistent with a belief Greece maybe on the cusp of default. There may be some in Germany happy to see Greece ‘fall by the euro wayside’, but a general desire amongst other nations to keep stability within the eurozone could see some last-minute, perhaps temporary bailout deal agreed.”
In his comments Monday, Varoufakis stressed that Greece’s creditors needed to “get their act together, and come to an agreement with us.”
Greece’s radical left government in recent days has sent conflicting messages on its finances as the state gradually runs out of money.
Over the weekend, a cabinet minister said Greece had “no money” to make a series of repayments to the IMF from June 5, but a government spokesman insisted the country would keep up payments as long as it could.
Wall Street stocks were similarly trading lower after a report showed lower US durable goods orders in April launched a holiday-shortened week.
In late morning trades, the Dow Jones Industrial Average slipped 0.94% to 18,160.52, while the broad-based S&P 500 fell 0.22% to 2,1268.06.
The tech-rich Nasdaq Composite Index shed 1.13% to 5,031.77 points.
Orders for US durable goods fell 0.5% last month due mainly to a drop in orders in the volatile transport sector. But orders for machinery and other non-defence-related capital goods were strong, rising one% in the month.
