Europe’s main stock markets were subdued yesterday ahead of a meeting by EU finance ministers to sign off on Greece’s new bailout, while traders also digested weak data from Italy and China.
In London, the benchmark FTSE 100 index rose 0.09 per cent to 5,888.30 points, in Paris, theCAC 40 added 0.07 per cent to 3,490.06 points and in Frankfurt the DAX 30 climbed 0.31 per cent to 6.901.35 points.
Elsewhere, Madrid fell by 1.24 per cent, Lisbon by 1.13 per cent, Milan fell by 0.13 per cent, Brussels slipped 0.04 per cent and Amsterdam edged up 0.02 per cent.
In foreign exchange trade, the European single currency was marginally higher at $1.3147 from $1.3120 late in New York on Friday. The dollar fell to 82.24 Japanese yen from 82.44 yen on Friday.
US stocks were mixed in afternoon trade with the Dow Jones Industrial Average up 0.22 per cent to 12,950.52 points, the broad-based S&P 500 dipped 0.10 per cent to 1,369.48 points and the tech-heavy Nasdaq Composite fell 0.15 per cent to 2,642.80 points.
“Equity markets this morning awoke to a slightly larger wall of worry to climb than they left on Friday afternoon, with Asia’s superpower spluttering once again in the face of a now established trend of softer economic performance,” said Spreadex trader David White.
“China’s trade deficit widened to a level not seen in 22 years, as export growth failed to match expectations (...) A quickening US recovery could well be offset by a slowing Chinese economy to some extent, but with an accommodative central bank and growthlikely to continue, deflationary concerns are unlikely to present more concern than they already have near-term.”
Leading indicators from the Organisation for Economic Cooperation and Development pointed to signs of firmer activity in the eurozone but below trend performance by China and Brazil.
Eurozone finance ministers were meanwhile to meet later Monday to give final approval to the second Greek bailout and discuss tightening measures to prevent a repetition of the crisis.
The ministers were expected to sign off on the €130 billion rescue programme after Greece’s private creditors approved wiping off some €100 billion from Athens’s debt in an operation that wascompleted yesterday.
“The euphoria over Greece narrowly avoiding a default ...has already been priced in and it appears that Athens has been taken care of for now,” said Kathleen Brooks, research director at trading group Forex.com.
“Going forward the focus for markets may keep risk assets slightly muted as investors price in the prospect of missed fiscal targets and weak growth in some of the peripheral (eurozone) countries” – notably Spain.
Spain surprised its eurozone partners this month when it announced that its deficit would reach 5.8 per cent this year instead of the 4.4 per cent target previously agreed with European Union authorities.
The head of the Eurogroup of finance ministers Jean-Claude Juncker called on Spain yesterday to respect its 2013 public deficit target but left the door open to negotiations on this year’s wider budget shortfall.
Heavily-indebted Italy meanwhile said it fell into recessionlate last year when the economy contracted by 0.7 percent in the fourth quarter.