Lingering concerns over the health of global economies, coupled
with uncertainty over debt negotiations in Greece, kept investors
on edge Monday, but equity markets stabilized after a sharp selloff
late last week.
The Stoxx Europe 600 index, dipped lower at the open but
recovered quickly to trade broadly unchanged on the day, following
a decline Friday after data showed that eurozone consumer prices
fell more in January than during any other month since July
2009.
In the U.S., meanwhile, futures pointed to a modestly higher
open, after markets declined Friday, burdened by figures that
showed economic growth in the country retreated to a modest pace in
the final months of 2014. Numbers out of China, over the weekend,
suggested the country's manufacturing sector contracted in January
for the first time in two years.
"There is not a lot to be happy about this morning," Rabobank
strategists wrote in a note despite equities recovering.
The lackluster Chinese and U.S. data, they said, signals that
from a growth perspective, "the world's two main engines are both
losing power at the same time."
Meanwhile, Athens's new antiausterity government begins a push
this month to convince eurozone countries to ease the terms under
which it received large international financial rescues in recent
years. Options include reducing Greece's budget constraints and
debt-service burdens.
Relations between Greece and the rest of the eurozone have been
rocky since the left-wing Syriza party won Greek elections on Jan.
25.
Athens' main stock exchange was trading 5% higher Monday,
cheered by efforts over the weekend from the government to calm
jitters, but it is still around 8% lower so far this year and down
almost 35% over the last six months.
Greece's Eurobank Ergasias SA, one of the banks whose shares
have been hit hardest in recent days, said over the weekend that
its chairman and chief executive had resigned sending its shares
more than 20% higher.
Nonetheless, Eurobank's shares are still down 27% this year and
a staggering 61% over the last six months.
In currency markets, the euro was marginally higher against the
dollar in early trade Monday at around $1.1320 after eurozone
manufacturing PMI for January fell in line with forecasts.
In fixed income markets, the yield on the German bund, generally
considered one of the lowest risk assets to invest in during times
of stress, continued to hover around 0.3%, close to an all-time
low. Bond yields fall as prices rise.
In commodity markets, Brent crude fell 2.5% to $51.64 per
barrel, retracing a rally Friday. Gold was broadly unchanged at
$1,280 a troy ounce.
Write to Josie Cox at josie.cox@wsj.com
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