European markets stutter as Greece uncertainty drags on

AP News
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Posted: Jun 17, 2015 8:37 AM
European markets stutter as Greece uncertainty drags on

LONDON (AP) — European stock markets fell Wednesday as investors fretted over the financial future of Greece and ahead of a policy statement from the U.S. Federal Reserve that could shed light on when it will raise interest rates.

KEEPING SCORE: In Europe, France's CAC 40 fell 1.2 percent to 4,781 while Germany's DAX was 0.7 percent lower at 10,966. Britain's FTSE 100 was down 0.6 percent to 6,673. Wall Street looked set for a fairly steady opening with Dow futures and the broader S&P 500 futures up 0.1 percent.

GREECE JITTERS: A day ahead of a meeting of the eurozone's 19 finance ministers, there was little sign of an imminent breakthrough in Greece's protracted bailout talks with international creditors. In fact, the two sides appear to be as far apart as ever. The Bank of Greece warned of the economic damage that a Greek exit from the euro would inflict on an economy that's already around 25 percent smaller than 2008. Greece needs to secure a deal with creditors in order to get its hands on its remaining bailout loans, which will help it pay upcoming debt commitments. By the end of the month, it has a 1.6 billion-euro ($1.8 billion) debt to the International Monetary Fund due.

ANALYST TAKE: "Thursday's eurogroup meeting was meant to be a time to hammer out the kinks of a deal; instead, each side is ramping up the finger-pointing rhetoric seemingly in preparation for the worst-case scenario," said Connor Campbell, a financial analyst at Spreadex.

FED WATCH: As if Greece wasn't enough, investors have the latest policy statement from the Fed to digest later. Investors will be looking for signs of when the U.S. central bank will begin raising its key interest rate after holding it close to zero for more than six years. Ultra-low rates have helped to drive a bull market in stocks. Many forecasters expect a rate hike in September if the economy keeps strengthening.

CURRENCIES: The Fed statement could go a long way to determining the dollar's fate over coming sessions. Ahead of the statement, it was fairly mixed with the euro up 0.2 percent at $1.1267, while the dollar was 0.5 percent firmer at 124.02 yen.

ASIA'S DAY: The Shanghai Composite Index started out declining for a third day but rebounded to end up 1.6 percent at 4,967.90. Tokyo's Nikkei 225 was off 0.2 percent at 20,219.27. Hong Kong's Hang Seng rose 0.7 percent to 26,753.79 and Seoul's Kospi added 0.3 percent to 2,034.86. Sydney's S&P-ASX 200 rose 1.1 percent to 5,595.40 and India's Sensex added 0.7 percent to 26,884.80.

ENERGY: Benchmark U.S. crude rose $1.13 to $61.10 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, gained $1.26 to $64.96 in London after losing 25 cents on Tuesday to $63.70.