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European Markets Summary

London Stocks End Markedly Lower

FTSE 100 closes down 2.5% at 5266.41, extending declines into the close, amid increasing doubts that tonight’s EU summit will achieve anything concrete, or prevent a Greek euro exit. “Today proves that the rally so far this week was nothing more than a bear squeeze or in other words a dead cat bounce,” says Capital Spreads. “The unknowns and incalculable damage that could be caused by a ‘Grexit’ are allowing the bears to sharpen their claws, sending investors rushing for cover as they reduce their exposure to equities,” Capital Spreads adds. Mining stocks suffer the brunt of the selling, with Vedanta Resources down 9.1% and Kazakhmys down 7.9%. On Thursday, UK GDP will be released at 0830 GMT, while in the US, durable goods and initial jobless claims will come at 1230 GMT.

Frankfurt Stocks Close Markedly Down

DAX closes 2.3% lower at 6285.75 amid rising concerns over Greece’s future after its former prime minister Papamedos said the risk of a Greek exit from the euro zone was real. Traders also point to the steadily weakening euro and Eurogroup president Jean-Claude Juncker saying that no decisions are likely to be made during a meeting of EU leaders Wednesday evening. The major stock movers include ThyssenKrupp, which closes down 5% after Fitch changed the outlook on the company’s debt to negative. Lufthansa ends 4.3% lower. Thursday’s data releases for Germany include GDP at 0600 GMT, PMI at 0730 GMT and Ifo business climate index at 0800 GMT; together with euro-zone PMI at the same time.

Paris Stocks Close Markedly Lower

CAC-40 closes down 2.6% at 3003.27, as investors are irked ahead of a meeting between European leaders this evening at which the latest backstop measures to solve the European debt crises are to be discussed. Headlines suggesting that European Union officials are preparing contingency plans for a potential Greek exit from the euro are obviously not helping the market’s tone. Most CAC-40 stocks are in the red, with banks bearing the brunt of investor worries. Credit Agricole is down 6.3%, Societe Generale down 4.3% and BNP Paribas 3.2% lower. Carrefour however rises 3.4% after a recommendation upgrade from Credit Suisse. And Alcatel-Lucent is up 0.7% after the company announced its first metro/core router product.

Amsterdam Stocks Close Sharply Lower

AEX closes 2.3% lower at 289.16 amid growing concerns that Greece will exit the euro zone. ING falls 5.1%, ArcelorMittal is down 4.9% and Air France-KLM loses 4.6%. Philips sheds 5.2%, with some analysts pointing to recent gloomy comments from CEO Van Houten, who said at an investors conference that the macroeconomic outlook had worsened. Thursday, markets will mainly focus on the outcome of the EU Summit in Brussels which is being held Wednesday evening.

Zurich Stocks Close Markedly Down

SMI closes 1.6% lower at 5817.91 with all major stocks down, ahead of a meeting of European Union leaders later Wednesday to discuss ways to boost growth in the euro zone. Additionally, concerns on Greece intensify after comments by former PM Papademos. “This is a sad day for the market, with corrections on financials and cyclical stocks blamed on macro woes,” a trader says. “Yesterday’s session was too good for this one to also be positive,” he adds. Credit Suisse and UBS are down 2.3% and 1.3%, while the luxury sector also takes a dip ahead of Thursday’s release of Swiss April export figures, with Richemont and Swatch falling 4.2% and 4.8% respectively. Roche is down 2.1%. Defensives Nestle and Novartis close 0.5% and 1.1% lower. In the broader market, Logitech loses 4.6% after Dell released earnings and outlook which were below-expectations.

Nordic Stocks Close With Major Losses

Nordic equity markets close significantly lower as investors are skeptical ahead of a meeting between European leaders which is due to commence Wednesday evening, amid continuing worries about Greece’s potential exit from the euro zone. OMXN40 closes 2.6% lower at 901.47, OBX is 3.6% lower at 358.09. In standout individual stocks, Nokia sheds 6.2% and H&M drops 2.7% while SSAB ends 5.5% lower as investors shy away from risk. On Thursday the focus will inevitably be on news from tonight’s informal EU summit. Attention will also be on a string of European economic data, including a reading of Germany’s 1Q GDP at 0600 GMT, Germany’s flash PMI at 0730 and the euro zone’s at 0800. In the Nordics, Riksbank’ First Deputy Governor Kerstin af Jochnick will give a speech from 0700 GMT.

Milan Stocks Close With Large Losses

FTSE-Mib closes down 3.7% at 12961, posting the deepest loss by a major blue-chip index in Europe Wednesday. It’s been a high-volatility session dominated by growing fears that the ‘informal’ EU Summit in Brussels later Wednesday will be just another session of ‘shop-talk’ with no material outcome. Italian financial stocks are as usual bearing the brunt of the downdraft in the Milan market, with Monte dei Paschi faring the worst, down 7.5%. Industrials are also particularly weak in Milan amid fears that a Greek exit from the euro zone will exacerbate the southern European regional slowdown. Ansaldo STS, Pirelil, Fiat Industrial and Finmeccanica all lose more than 5%. President Draghi will speak in Rome, Thursday at 1300 GMT.

Madrid Stocks Close Sharply Lower

IBEX-35 plunges to close 3.3% lower at 6441 on growing concerns that European leaders might be preparing for Greece to leave the euro area. Greece’s former PM Papademos said Tuesday that the risk that the country could leave the common currency area was real, spurring an increase in risk aversion in European bourses. The major moving Spanish stocks include Sacyr Vallehermoso which closes 11% lower, after sizeable gains Tuesday. After the close this evening, investors here are likely to follow comments by Finance Minister Luis de Guindos in Parliament, for any potential indications about the size and type of capital injection for Bankia.

Athens Stocks End Down Amid Summit Skepticism

ASE ends down 1.4% at 528.51, following a series of headlines that have intensified worries about a Greek exit from the euro zone. At the same time, market participants have grown skeptical that anything significant will be achieved at tonight’s informal EU summit, particularly after Germany made it clear it will oppose the proposal of jointly-backed euro-zone bonds. Brown Brothers Harriman says it seems unreasonable to expect anything concrete of the meeting, which will be held over a dinner. “Negotiating positions will be staked out, but most of the issues will require greater negotiations. June or even July seems a more likely time frame for yet another comprehensive solution,” it adds.

Prague Stocks Close Lower Slightly Lower

PX closes down 0.5% at 878.1 amid a selloff across all of Europe’s major equity markets, ahead of a Summit of European Union leaders Wednesday evening. “Markets in Europe are pretty nervous,” a trader at brokerage Cyrrus says. All major Czech blue chip stocks are lower. NWR leads with a 1.4% loss and Telefonica Czech is down 1%. Traders are not optimistic about the outlook for the market’s tone Thursday.


StockMarketNews Research Team 

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