Greece bailout uncertainty weighs on markets
Global stock markets were weighed down Friday by ongoing uncertainty over the future of Greece’s bailout after the International Monetary Fund decided to walk away from discussions in Brussels, citing a distinct lack of progress.
In Europe, the UK’s FTSE 100 dropped 0.7 percent to 6,802, while Germany’s DAX fell 1 percent to 11,215. The CAC-40 in France was 1.2 percent lower at 4,914. Unsurprisingly Greek shares were the worst-performing in Europe, with the main Athens index down 3 percent. U.S. stocks were poised for modest declines at the bell with Dow futures and the broader S&P 500 futures down 0.3 percent.
Friday’s declines follow the IMF’s move to pull its negotiators out of the talks in Brussels and send them back to Washington, D.C., saying there had been no progress and that major differences remained in key issues. The move contrasted with recent optimism expressed by the Greek side that some sort of deal will be cobbled together by the end of the month. Greece’s 240 billion-euro (US$270 billion) bailout expires June 30, at which point the country will lose access to the rescue loans it desperately needs to repay debts and avoid a default that could force it out of the euro. It looks increasingly like next week’s meeting of eurozone finance ministers in Luxembourg could prove decisive in sealing Greece’s financial fate.
“Something like this was going to have to happen at some point,” said Craig Erlam, senior market analyst at OANDA. “One side is going to have to offer some serious concessions if a deal is going to be reached.”
Asian Stocks Follow US Gains,
Euro Hurt on IMF Walkout
The euro retreated in Asia Friday on concerns about Greece’s bailout reform talks after the IMF walked out, while Japanese stocks ended higher thanks to a pick-up in the dollar against the yen.
Regional investors were given another positive lead from Wall Street following a better- than- forecast U.S. retail sales report.
Tokyo climbed 0.12 percent, or 24.11 points, to 20,407.08, although the gains were capped by worries about the Greece talks.
Hong Kong rose 1.39 percent, or 372.69 points, to close at 27,280.54 and Shanghai added 0.87 percent, or 44.76 points, to 5,166.35.
But Sydney fell 0.20 percent, or 11.35 points, to 5,545.3 and Seoul was 0.22 percent lower, dropping 4.44 points to 2,052.17.
U.S. shares jumped for a second consecutive day Thursday after the U.S. Commerce Department said retail sales in May rose 1.2 percent, better than the 1.1 percent gain forecast by analysts.
The figures are the latest in a string of data showing the world’s number one economy is back on the road to recovery after a wobbly few months at the start of the year caused by a severe winter.
The Dow gained 0.22 percent, the S&P 500 added 0.17 percent and the Nasdaq rose 0.11 percent.
Gold fetched US$ 1,179.90 compared with US$1,179.55 late Thursday. In other markets: — Wellington fell 0.20 percent, or 11.45 points, to 5,846.97.
— Bangkok slipped 0.43 percent, or 6.58 points, to 1,508.23.
— Singapore closed up 0.18 percent, or 6.18 points, to 3,353.85.
— Jakarta ended up 0.14 percent, or 7.01 points, at 4,935.82.
— Kuala Lumpur was flat, slipping 0.39 points to 1,734.37.
— Mumbai rose 0.21 percent, or 54.32 points, to close at 26,425.30.
— Manila was closed for a public holiday.