Europe Stocks Drop Second Day as Greek Groundhog Day Continues

European stocks extended a selloff as the region’s leaders differed on how Greek talks were progressing.

The Stoxx Europe 600 Index lost 0.2 percent to 396.39 at the close of trading. French President Francois Hollande held out hope of a deal for Greece, while his German counterpart said negotiations looked to be going backward. The Greek ASE Index added 0.1 percent, after swinging between gains and losses at least 11 times.

Stocks rose as much as 0.5 percent earlier, reversing a drop of 0.8 percent, after creditor institutions unanimously agreed on a set of proposals for finance ministers to review. They pared gains as Greece disagreed. Euro-area finance ministers are now weighing competing proposals to resolve the standoff, with Greece facing both an expiry of its current bailout package and a loan repayment deadline on June 30.

News flow from the negotiations has whipsawed stocks in recent days. While the Euro Stoxx 50 Index posted its best four-day gain since 2012 earlier this week on speculation Greece was close to an agreement, it fell yesterday as the optimism faded. The gauge fluctuated before closing almost unchanged Thursday.

Among shares active on corporate news, Hennes & Mauritz AB fell 3.2 percent after its quarterly gross margin and profit missed analysts’ estimates. Vallourec SA tumbled 5.8 percent after Credit Suisse Group AG downgraded the steelmaker to underperform, similar to sell.

Tesco Plc rose 0.9 percent as people familiar with the matter said it has received bids for its South Korean unit from private-equity firms including Carlyle Group LP and KKR & Co. Altice SA rallied 6 percent after a report said Bouygues SA remains open to a new offer from the company’s Numericable-SFR unit.

Petrofac Ltd. climbed 4.2 percent after Nomura Holdings Inc. recommended buying the shares, citing potential for shareholder returns. The company is heading for its best week since 2010 after saying profit may be heavily weighted toward the second half of the year.

Source : Bloomberg

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