By Carla Mozee, MarketWatch
Stocks across Europe fell Thursday, deflated as a reported deal
between debt-laden Greece and its creditors hasn't come through,
the prospect of which sent shares soaring in the previous
session.
The Stoxx Europe 600 gave up 0.4% to 407.40, with only the
health-care, consumer-services and technology sectors advancing
modestly.
On the country indexes, Germany's DAX 30 shed 0.1% to 11,762.80
after Wednesday's leap of 1.3%. Frances's CAC 40 gave up 0.5% at
5,155.39, and in London, the FTSE 100 was off fractionally at
7,033.19.
The Stoxx 600 on Wednesday popped up 1.3%
(http://www.marketwatch.com/story/european-stocks-jump-on-reports-greece-nearing-a-debt-deal-2015-05-27),
following comments from Greece's Prime Minister Alexis Tsipras that
suggested Athens was in the final stretch of a deal on economic
reforms with creditors.
But other key European officials late Wednesday rebuffed the
suggestion, saying talks were still ongoing. International Monetary
Fund Managing Director Christine Lagarde said in a TV interview
that she "would not say that we already have reached substantial
results," according to a Reuters report.
Greece, which is feared to be running out of cash, needs to cut
a deal to unlock its next round of bailout funds. The country faces
making a 1.5 billion-euro debt-service payment to the International
Monetary Fund on June 5.
But the Athex Composite managed to swing out of the red and rise
0.1%, to 853.55. There, shares of Piraeus Bank SA climbed 3.8%, and
Alpha Bank AE moved up 1.5%. Greek bond prices were also rose,
sending the yield on 2-year debt down 47 basis points to 22.54%.
The yield on 10-year debt was down 6 basis points at 10.96%. Prices
and yields move inversely.
The euro (EURUSD) was able to remain higher against the dollar
(DXY), at $1.0939, compared with $1.0905 late Wednesday in New
York.
The euro's gain suggests "the market is increasingly confident
that a deal will be struck," said Richard Perry, market analyst at
Hantec Markets, in a Thursday note. The lack of retracement in the
move "despite the denial of the European Commission that a deal was
imminent, was also interesting and may well now be supportive for
the euro, which has come under significant strain in recent days,"
he said.
Investors on Thursday were also assessing comments made by
European Central Bank Governing Council member Ewald Nowotny. He
told CNBC
(http://www.marketwatch.com/story/ecbs-nowotny-urges-caution-on-qe-exit-cnbc-2015-05-28)
the central bank will have to be "very careful" when it eventually
unwinds its quantitative-easing program. The ECB in March launched
a EUR1.1 trillion bond-buying program, set to run to September
2016.
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