China down 8.5 per­cent as Greece holds crunch talks

The China Post - - MARKETS -

Euro­pean stocks slid Fri­day as traders awaited the out­come of a Euro­pean sum­mit and crunch talks be­tween Greece and its cred­i­tors over the week­end.

Lon­don’s bench­mark FTSE 100 in­dex dropped 0.77 per­cent to stand at 6,755.70 points in mid­day deals.

The CAC-40 in Paris edged down 0.08 per­cent to 5,037.86 points and Frank­furt’s DAX 30 fell 0.30 per­cent to stand at 11,438.54 com­pared with Thurs­day’s close.

Athens’ main in­dex dipped 0.11 per­cent to 780.82 points.

“Eq­ui­ties are in the red ac­cel­er­at­ing their sell-off from late yesterday as we move into what is be­ing billed as the last week­end for Greece to present ac­cept­able re­forms,” said Mike van Dulken, head of re­search at Ac­cendo Mar­kets.

“While another last- minute week­end agree­ment would surely mean a re­lief rally come Mon­day, con­tin­ued stub­born­ness on both sides could equally take us into un­charted de­fault/euro-exit ter­ri­tory and the ac­com­pa­ny­ing un­cer­tainty.”

Euro­pean Union lead­ers were meet­ing in Brus­sels on Fri­day and eu­ro­zone fi­nance min­is­ters were set to gather on Satur­day for last­minute talks in a bid to save Athens from de­fault.

The lead­ers of Ger­many and France warned Greece that it must reach a debt deal with its cred­i­tors at “decisive” talks on Satur­day to avert de­fault and a pos­si­ble euro exit.

Asia Mar­kets in Re­treat

Asian mar­kets sank again Fri­day af­ter Greece’s latest bailout re­form talks failed to reach a deal days be­fore a ma­jor dead­line, while Shang­hai col­lapsed on fears Chi­nese stocks are over­val­ued af­ter a year-long ad­vance.

The euro also turned lower as in­vestors looked ahead to the week­end, when EU fi­nance min­is­ters said they will hold more last­minute ne­go­ti­a­tions to break a five-month im­passe over Greece’s debts.

Tokyo fell 0.31 per­cent, or 65.25 points, to close at 20,706.15, while Syd­ney shed 1.54 per­cent, or 86.80 points, to 5,545.90.

Shang­hai plunged 8.5 per­cent at one point, its big­gest loss in eight years, as in­vestors that had flooded the mar­ket on mar­gin trad­ing — bor­row­ing cash to buy stocks — ran for the door.

Chi­nese eq­ui­ties, which more than dou­bled in value in the year to June 12, even­tu­ally closed down 7.40 per­cent, or 334.91 points, at 4,192.87, its low­est point since the start of May.

The bench­mark in­dex has fallen al­most a fifth in two weeks, hav­ing soared more than 140 per­cent in the pre­vi­ous 12 months.

Hong Kong felt some of the pain from across the bor­der, los­ing 1.78 per­cent, or 481.88 points, to close at 26,663.87.

But Seoul gained 0.25 per­cent, or 5.20 points, to 2,090.26 on hopes that a new US$14 bil­lion stim­u­lus pack­age would help boost the sag­ging econ­omy, which has been hit by the deadly MERS out­break.

With both sides un­will­ing to budge on key is­sues — mostly tax and pen­sion re­form — in­vestors fear Greece will not get the fi­nal tranche of its in­ter­na­tional bailout by the end of the month.

With­out that money Athens will de­fault on a 1.5 bil­lion euro pay­ment due to the IMF, likely forc­ing it to crash out of the eu­ro­zone or even the Euro­pean Union.

Fears over what that sce­nario could mean for the world econ­omy once again hit U.S. shares on Thurs­day. The Dow fell 0.42 per- cent, the S&P 500 lost 0.30 per­cent and the Nas­daq eased 0.20 per­cent.

Merkel and French Pres­i­dent Fran­cois Hol­lande said Satur­day’s meet­ing would be cru­cial to seal­ing a deal.

“We have to keep work­ing be­cause time is press­ing and the Eurogroup (meet­ing) on Satur­day will have a decisive im­por­tance,” Merkel told a news con­fer­ence in Brus­sels.

“All the lead­ers sup­ported the idea that ev­ery­thing must be done to find a so­lu­tion on Satur­day.”

Gold fetched US$ 1,174.05 com­pared with US$1,175.88 late Thurs­day. In other mar­kets: — Welling­ton rose 0.39 per­cent, or 22.16 points, to 5,755.45.

— Manila gained 0.53 per­cent, or 40.14 points, to 7,622.05.

— Kuala Lumpur lost 0.37 per­cent, or 6.34 points, to 1,710.47.

— Sin­ga­pore closed down 0.86 per­cent, or 28.97 points, to 3,320.90.

— Jakarta was flat, edg­ing up 2.96 points to 4,923.01.

— Bangkok closed 1,518.03 points.

— Mum­bai fell 0.30 per­cent, or 84.13 points, to 27,811.84.

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