Greek Drop Leads Europe Stocks Down Amid Growing Default Concern

A slide in Greek shares led European stocks to their lowest level in two months on concern that debt negotiations will fail to secure funding in time to prevent the nation defaulting.

The Stoxx Europe 600 Index fell 1.5 percent to 391.01 at the close of trading, after earlier rising as much as 1.1 percent on better-than-estimated company results. Shares extended losses after a Greek official said a funding deal won’t be possible until international creditors agree on a common set of demands. Greece’s ASE Index slid 3.9 percent, the most in seven weeks.

German Finance Minister Wolfgang Schaeuble said Greece may not be able complete the work needed for an agreement on financial aid in time for funds to be disbursed by the May 12 deadline for repayment of about 1 billion euros ($ 1.1 billion) to the International Monetary Fund.

The Stoxx 600 has still risen 14 percent this year amid a weaker euro and unprecedented monetary stimulus, prompting the European Commission to raise its euro-area growth forecast.

The U.K.’s FTSE 100 Index reversed an earlier advance of as much as 1 percent, falling 0.8 percent, as the market reopened after a holiday. The Swiss Market Index gave up gains of as much as 1.2 percent, also dropping 0.8 percent. Germany’s DAX Index slid 2.5 percent to its lowest level in two months.

Source: Bloomberg


China Stock-Index Futures Rise After Baoding Tianwei Default

PT BEST PROFIT FUTURESChinese stock-index futures rose as Baoding Tianwei Group became the country’s first state-owned company to default on an onshore bond, underscoring the government’s pledge to open a cooling economy to market forces.

CSI 300 Index futures for May delivery, the most active contract, climbed 0.7 percent to 4,638.20 at 9:16 a.m., while the FTSE China A50 futures for April added 0.2 percent. China Minsheng Bank may be active after the lender reported a 5.5 percent gain in first-quarter net income. Ten companies will be making their trading debuts Wednesday including Beijing Dahao Technology Corp. and Ningbo Medical System Biotechnology Co.

The Shanghai Composite Index rose 1.8 percent to 4,293.62 on Tuesday, while the Hang Seng China Enterprises Index in Hong Kong climbed 3 percent. Tianwei, a transformer maker that is a unit of the Chinese government-owned China South Industries Group Corp., said it will fail to pay 85.5 million yuan ($ 13.8 million) of bond interest due Tuesday.


Source: Bloomberg