Click & Close Ads
Click & Close Ads
European stocks were choppy Thursday as investors awaited clarity from the latest Greek bailout talks.
Having slipped in early trade, the Stoxx Europe 600 flitted between losses and gains and was up 0.2% around midday. The main Athens stock index was up 0.5% after falling as low as 2.2% on the day and rising as high as 1.8%, according to FactSet.
In the U.S., S&P 500 futures indicated a 0.4% gain at the open. Futures contracts, however, don’t always accurately predict moves after the opening bell.
“There is a temptation to focus on every twist and turn in developments and that is why markets are moving so much,” said Neil Mellor, a strategist at BNY Mellon in London.
“A deal is still far from inevitable but I think that overall some progress appears to have been made this week,” he added.Late Wednesday, eurozone finance ministers called off a key meeting after little more than an hour, saying that Greek Prime Minister Alexis Tsipras first had to agree on budget cuts and policy overhauls with the three institutions overseeing the country’s bailout.
Mr. Tsipras met Thursday morning with the heads of the institutions. The finance ministers were set to meet later in the day, expecting to have a final proposal in hand they can assess to allow Athens to get desperately needed cash and avoid a messy default and possible exit from the eurozone.
Without a new transfer from its €245 billion ($275 billion) bailout plan by June 30, Athens will be unable to make a €1.54 billion payment to the International Monetary Fund.
AdvertisementClick & Close Ads
Click & Close Ads
“We still think that there will [be] an agreement, but only at the last moment,” said Eirini Tsekeridou, analyst at Swiss private bank Julius Baer. Right now though, she added, it is hard to determine when that “last moment” might be.
Earlier in the week, stocks had rallied as investors sensed a breakthrough in negotiations.
Barclays economists said in a note Thursday that some of that “euphoria” had diminished. “The situation remains very tense, particularly with respect to the banking sector,” they added.
Lee Hardman, a strategist at Bank of Tokyo-Mitsubishi UFJ, wrote in a note that failure to reach an agreement by the end of the week “would increase the likelihood that capital controls will soon need to [be] implemented in Greece as deposit flight from Greek banks would likely accelerate.”
Shares in the country’s four biggest banks have all lost between 25% and 58% in value so far this year.
Greek bonds, which sold off sharply Wednesday after rising earlier in the week, edged lower Thursday.
The yield on the country’s two-year benchmark bond was at 21.5%, around 0.04 percentage point higher on the day. Trade, however, remains very thin, strategists said. Yields rise as bond prices fall.
The German 10-year bond yield was 0.03 percentage point higher on the day at 0.87%.
The euro was broadly flat against the dollar at around $1.119.
In commodity markets, Brent crude was 0.1% higher at $63.55 per barrel. Gold was flat at $1,172.80 per troy ounce.
Corrections & Amplifications
An earlier version of this article misspelled the last name of Lee Bank of Tokyo-Mitsubishi UFJ, as Hardmann.Click & Close Ads
Click & Close Ads
Thursday, June 25, 2015
