European stocks gain as Greece talks debt

LONDON: Europe’s main stock markets rose yesterday as Greece’s new anti-austerity government seeks support for a renegotiation of the country’s 240 billion euro ($270 billion) bailout in the face of German opposition. Greek stocks rallied 4.63 percent, with Greek Finance Minister Yanis Varoufakis meeting his British counterpart — the latest stop on his European charm offensive.

US President Barack Obama, who yesterday put forward a $4-trillion budget loaded with spending and tax reforms, warned the world that continued imposition of tough austerity programs on Greece could backfire on its creditors. “You cannot keep on squeezing countries that are in the midst of depression,” Obama told CNN.

“At some point, there has to be a growth strategy in order for them to pay off their debts to eliminate some of their deficits.”

In late morning deals, London’s benchmark FTSE 100 index was up 0.18 percent at 6,761.76 points.

Frankfurt’s DAX 30 index climbed 0.49 percent to 10,746.28 points, and in Paris the CAC 40 edged up 0.04 percent to stand at 4,606.16 compared with Friday’s close. The euro increased to $1.1353 from $1.1284 late in New York on Friday. In Asia, Shanghai stocks tumbled yesterday after two gauges of Chinese manufacturing activity showed contraction in January.

US markets had provided a negative lead after the Department of Commerce said Friday that the American economy expanded at an annual rate of 2.6 percent in the fourth quarter, well below the 5.0 percent in the previous three months. In corporate movement yesterday, shares in Ryanair slid 4.1 percent to 9.97 euros as the no-frills Irish airline gave a cautious outlook after swinging into profit during its third quarter.

Ryanair said its profit growth expectations were “modest” for next year as its expects rivals to cut fares because of cheaper oil prices. “It is important that analysts are mindful of this likely increased price competition when revising their forecasts,”chief executive Michael O’Leary said in the statement.

Oil prices fell yesterday as dealers took profits from steep gains in volatile month-end trading last week. The oil market has lost more than half its value since June last year when the commodity was sitting at more than $100 a barrel, largely owing to a surge in global reserves boosted by robust US shale oil production.

The problem was exacerbated in November after the OPEC oil cartel insisted that it would maintain output levels despite plunging prices. The 12-nation group pumps about 30 percent of global crude. —AFP