Monday 26 September 2016

Greek brinkmanship drags European stocks lower

Reuters

Published 06/06/2015 | 02:30

Greek Finance Minister Yanis Varoufakis attends a parliamentary session where Greek Prime Minister Alexis Tsipras will brief lawmakers over the ongoing talks with the country's lenders, in Athens, Greece. Photo: Reuters
Greek Finance Minister Yanis Varoufakis attends a parliamentary session where Greek Prime Minister Alexis Tsipras will brief lawmakers over the ongoing talks with the country's lenders, in Athens, Greece. Photo: Reuters

European shares dropped yesterday, led lower by a slump in the Athens stock market that took Greek stocks to one-month lows after the country delayed a debt payment due to the IMF.

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In Dublin the Iseq index of Irish shares closed down two-thirds of 1pc at 6,102.48.

Greece's benchmark Athex General Composite (ATG) index tumbled 5pc, briefly dipping to its lowest level since May 6.

That was after Greece delayed a payment to the International Monetary Fund, due yesterday, as Prime Minister Alexis Tsipras demanded changes to tough terms from international creditors for aid to stave off default.

Economic stimulus measures from the European Central Bank (ECB), coupled with record low interest rates, have cushioned the impact of Greece on European stock markets overall.

Nevertheless equities were weaker yesterday as traders viewed the Greek impasse as an opportunity to sell European stocks, many of which have had a good run so far in 2015, with the FTSEurofirst 300 up 13pc. The lingering uncertainty over Greece has come against a volatile market backdrop in which yields on German Bunds rose to eight-month highs earlier this week.

European stock markets also stayed in negative territory after US employment figures were released.

At home Bank of Ireland was the most heavily traded share yesterday, ending the session 1.48pc weaker at €3.38 a share.

Ryanair at €11.70 a share and Aer Lingus stock at €2.42 were each just over a half a percent weaker.

European share were lower despite US jobs growth accelerating sharply in May and wages there picked up, providing signs of economic momentum that bolstered prospects for a September interest rate hike from the US Federal Reserve. That pushed the dollar up against the euro.

Irish Independent

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