European stocks slide as ministers meet on Greece

Europe’s main stock markets slid yesterday in cautious deals as eurozone finance ministers met again to discuss the release of the next slice of Greece’s bailout cash.

London’s FTSE 100 index of leading companies dropped 0.56 per cent to 5,786.72 points, while in Frankfurt, the DAX 30 gave up 0.23 per cent to 7,292.03 points, and Paris’ CAC 40 fell 0.79 per cent to 3,500.94 points.

The European single currency slid to $1.2961 compared to $1.2973 late in New York on Friday.

On the London Bullion Market, gold prices rose to $1,750.50 an ounce from $1,734.50 on Friday.

Eurozone finance ministers met yesterday for the third time in two weeks on immediate funding to avert Greece going bankrupt and to deal with the country’s ever-growing mountain of debt.

Greece has been waiting since June for a loan instalment of €31.2 billion to avoid running out of money sometime around the end of the year.

The funds are part of a back-up €130-billion rescue granted early this year.

“After the strong gains seen last week it was perhaps inevitable that we would see a bit of a pullback ahead of this evening’s press conference of Eurogroup finance ministers,” said Michael Hewson, Senior Market Analyst at CMC Markets UK. He said “investors remain cautious as to whether we will see any type of agreement on the latest Greek aid programme.”

The IMF has been pushing eurozone countries to write off at least part of their loans to Greece to bring the country’s debt down to a manageable level, but Germany has led opposition to this politically unpalatable option.

“Although officially no one wants to discuss any haircuts to the debt, as this is politically very unpalatable, a debt waiver is being eyed (in talks on how) to bring Greek debt to sustainable levels,” said trader Anita Paluch at Gekko Global Markets.

In company news, top Barclays shareholder Qatar Holding said in a statement that the group had sold its remaining warrants in the London-listed lender, but added that its 6.7-per cent stake was not affected.

However in reaction, Barclays share price dropped 5.4 per cent to 240.5 pence.

“Qatar Holding have exercised their warrants into stock – long-term option contracts – in Barclays, which they got their hands on at the height of the banking crisis, and offloaded the stock,” said TJ Markets analyst Manoj Ladwa.

“They still remain holders of their core position and seem to be taking a significant profit out of the trade.”

Meanwhile the showdown between global steel giant ArcelorMittal and France over its Florange plant hit new heights yesterday as a minister threatened to temporarily nationalise the site and said the company was no longer welcome in the country.

Newspaper Le Monde quoted members of the Mittal family as saying they were “extremely shocked” by Montebourg’s remarks.

ArcelorMittal’s shares fell 1.54 per cent to €11.53 in trading on the Paris stock exchange.

US stocks slumped yesterday after breaking a six-week slump with solid gains last week, with the jury still out over how strong the crucial Black Friday holiday sales went for retailers.

In midday trade with the Dow Jones Industrial Average down 0.76 per cent to 12,911.24 points, the broad-market S&P 500 index lost 0.70 per cent to 1,399.35 points, while the Nasdaq Composite slid 0.33 per cent to 2,956.97 points.

Elsewhere yesterday, Asian markets were mixed as investors also awaited the outcome of the eurozone gathering, and amid a simmering budgetary impasse in Washington. Tokyo rose 0.24 per cent and Sydney gained 0.25 per cent, but Seoul fell 0.15 per cent, Shanghai slid 0.49 per cent and Hong Kong closed down 0.24 per cent.


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