World stocks slip on Greek impasse with creditors
Greece’s decision to bundle together its upcoming repayments to the International Monetary Fund roiled financial markets Friday as investors fretted over the possibility of a Greek debt default and the country’s exit from the euro. U.S. jobs figures later will provide investors with a distraction from the mounting uncertainty over Greece’s financial future.
In Europe, Greek shares led the way lower with the benchmark Athens index down 5 percent. Elsewhere, France’s CAC- 40 slid 1.5 percent to 4,912 while Germany’s DAX fell 1.4 percent to 11,180. The United Kingdom’s FTSE 100 fell 0.9 percent to 6,793. U.S. stocks were poised for a lower opening with Dow futures and the broader S&P 500 futures down 0.5 percent.
The decision Thursday by the Greek government to bundle together its four payments totaling 1.6 billion euros (US$1.8 billion) due to the International Monetary Fund this month into one on June 30 raised fears across markets that the country’s financial position is even worse thought, threatening its place in the euro. It’s the first time a developed economy has taken the option of bundling payments together — an emergency maneuver that’s allowed by the IMF but taken up last by Zambia in the 1980s. Prime Minister Alexis Tsipras is scheduled to address an emergency session of parliament Friday as discontent rises within his party.
“Last night’s sudden change of mind has raised the stakes even further as this high stakes game of Jenga goes on between Greece and its creditors,” said Michael Hewson, chief market analyst at CMC Markets. “One false move from one side or the other, and the whole fragile edifice could well come tumbling down.”
Though clearly focusing on the developments surrounding Greece, investors have key U.S. data to digest before Wall Street opens for business. May’s nonfarm payrolls data could well set the market tone for a while as investors assess when the Federal Reserve will start raising interest rates. Economists predict that employers added 227,500 jobs in May and the unemployment rate will hold steady at 5.4 percent. “Having seen the previous three sets of figures being revised lower, and the slightly cooler economic data releases the U.S. has had, expectations could be forgiven for dropping a little,” said Alastair McCaig, market analyst at IG.
Tokyo slipped 0.13 percent, or 27.29 points, to close at 20,460.90, Sydney shed 0.11 percent, or 5.80 points, to 5,498.50 — a fifthstraight loss — and Seoul was down 0.23 percent, or 4.76 points, at 2,068.10.
Hong Kong tumbled 1.06 percent, or 291.73 points, to 27,260.16 but Shanghai rose 1.54 percent, or 75.99 points to 5,023.10 — above 5,000 points for the first time since January 2008.
Gold fetched US$ 1,176.56 compared with US$1,183.30 late Thursday. In other markets: — Wellington was marginally higher, adding 2.46 points to 5,867.90.
— Manila closed 0.36 percent, or 26.95 points, lower at 7,526.70.
Universal Robina sank 3.26 percent to 187 pesos, SM Prime Holdings was down 0.51 percent at 19.40 pesos and Ayala Land fell 1.02 percent to 38.80 pesos.
— Bangkok rose 1.10 percent, or 16.47 points, to 1,507.37.
Siam Cement added 2.31 perent to 532.00 baht, while Airports of Thailand gained 1.65 percent to 308.00 baht.
— Singapore fell 0.34 percent, or 11.33 points, to 3,333.67.
United Overseas Bank fell 0.04 percent to SG$22.79 while real estate developer Capitaland declined 0.58 percent to SG$3.41.
— Jakarta ended up 0.09 percent, or 4.75 points, at 5,100.57.
Indonesia- based oil company PT AKR Corporindo Tbk gained 2.70 percent to 5,700 rupiah, while concrete company PT Wijaya Karya Beton Tbk fell 2.28 percent to 1,070 rupiah.
— Kuala Lumpur rose 0.22 percent, or 3.85 points, to 1,745.33.
British American Tobacco Malaysia gained 3.28 percent to 63.00 ringgit, while Felda Global Ventures Holdings slid 2.04 percent to end at 1.92 ringgit.
— Mumbai fell 0.17 percent, or 44.93 points, to end at 26,768.49.
ICICI Bank lost 2.18 percent to end at 284.50 rupees, while Coal India rose 4.44 percent to 405.60 rupees.