Euro-zone shares set for biggest weekly fall this year

LONDON: A top euro-zone share index was set for its biggest weekly fall this year yesterday, with many investors focusing on a crucial vote in Greece over its debt negotiations at the weekend. The euro zone Euro STOXX 50 index was on track for its worst week since December. The index was down 0.3 percent at 3,451 points, marking a weekly fall of around 4.4 percent since last Friday.

The FTSEurofirst 300 slipped 0.2 percent, also set for its biggest weekly fall since late April, while Germany’s DAX equity index was flat. European stock markets have been hit by concerns over mounting tensions between Greece and its international creditors since the government in Athens announced a surprise referendum on the terms of a new bailout program.

Ahead of tomorrow’s vote-which could determine the country’s future in the euro-zone-the two campaigns are finely balanced, with “Yes” supporters of the bailout terms taking a slight lead in the latest poll.

Peter Oppenheimer, chief global strategist at Goldman Sachs, said a worst-case scenario in case the Greeks voted “No” to the bailout program could see the Euro STOXX fall some 10 percent to 3,150 points. “Our clients are certainly not panicking, but they’re generally holding back from taking up new positions,” added Rupert Baker, equity sales executive at Mirabaud Securities.

Banks were also in the spotlight, with Royal Bank of Scotland declining by 1.9 percent after news that the statebacked British bank may need to pay $13 billion to settle claims it misled investors in mortgage-backed securities, according to documents filed in a US court.—Reuters