Europe stocks mixed as G7 meets under Greek shadow

29/05/2015 01:59 AST

European equity markets ended the day mixed yesterday as G7 finance ministers met under the shadow of the increasingly tense Greek crisis.

London’s benchmark FTSE 100 index of top companies finished 0.11% higher compared with Wednesday’s close to 7,040.92 points.

But Greece weighed on eurozone stocks, with Frankfurt’s DAX 30 falling 0.79% to 11,677.57 and in Paris the CAC 40 dropped 0.86% to 5,137.83 points.

The European single currency rose to $1.0909 from $1.0906 late in New York on Wednesday, when it had briefly touched a one-month nadir of $1.0819.

Finance ministers and central bank governors of the seven wealthiest nations held talks in Dresden yesterday on the global economy and tax evasion. But optimistic comments out of Athens about an imminent deal that were quickly refuted by Greece’s creditors put the Greek crisis high in investors’ minds.

“Traders are sick of the non-stop back and forth, and whenever Greece is in crisis talks there is always a series of comments from different parties involved in the negotiations which contradict each other, and traders do not know who to trust,” said IG analyst David Madden. “It was a delayed reaction, but European stocks fell yesterday once it had been fully determined from new official comments that Greece is still far apart from creditors over conditions for the country’s bailout,” concurred CMC market analyst Jasper Lawler.

Officials in Athens said yesterday they hoped to conclude a deal with Greece’s European Union-International Monetary Fund creditors by Sunday to unlock the final €7.2bn ($7.8bn) of bailout loan money following four months of fractious talks.

“We intend to wrap up the agreement very quickly,” Greek government spokesman Gabriel Sakellaridis said at a news conference, noting Greece’s government is “working on having an agreement by Sunday.”

However the EU quickly poured cold water on suggestions of rapid progress.

“It is wrong to say, like the Greeks have, that we’ve gone three-quarters of the way to reaching a deal,” EU Commissioner for Economic and Monetary Affairs Pierre Moscovici told French public radio, France Culture, on the sidelines of the Dresden meeting. “There’s still a lot of work to do,” he added.

The Greek government is running out of cash and may not have enough to repay earlier IMF loans due in a series of payments from June 5.

There are concerns that a Greek default on its payments could trigger a chain of events that could see the country tumbling out of the eurozone.

In New York, US stocks were mixed as Avago Technologies announcing a $37bn deal to acquire fellow chipmaker Broadcom.

In midday trading the Dow Jones Industrial Average was 0.32% lower at 18,105.27 points. The broad-based S&P 500 rose 0.92% to 2,123.48, while the tech-rich Nasdaq Composite Index slid 0.25% to 5,093.65, retreating from Wednesday’s record.

AFP