Monday 22 January 2018

Greece set to default on IMF loan, European shares extend slide

An employee of a foreign exchange trading company stands in front of monitors displaying the current exchange rate of the Japanese yen against the Euro in Tokyo June 30, 2015
An employee of a foreign exchange trading company stands in front of monitors displaying the current exchange rate of the Japanese yen against the Euro in Tokyo June 30, 2015

European shares fell on Tuesday for a second straight session as a conflict between Greece and its lenders intensified, with Greece looking set to default on a major international loan.

The pan-European FTSEurofirst 300 index was down 0.5 percent at 1,523.23 points by 0705 GMT, extending falls after a 2.8 percent slump on Monday.

With Greece hours away from defaulting on a €1.6bn loan from the International Monetary Fund, tens of thousands of Greeks rallied on Monday to back their leftwing government in a clash with foreign lenders which has pushed Greece close to financial chaos and forced a shutdown of its banking system.

While European Commission President Jean-Claude Juncker made a last minute offer in a bid to reach a deal before Tuesday's deadline, there was little sign that Greek Prime Minister Alexis Tsipras was prepared to drop his repeated rejections of the bailout offer.

"Greece (remains) centre stage and the wide consensus points to a default on Tuesday," Jonathan Sudaria, trader at London Capital Group, said in a note.

Euro zone stocks suffered their biggest one-day fall since 2011 on Monday, with southern European banks in particular getting pummeled after Greece shut its banks and imposed capital controls.

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