On 07 July, 2015 – Greece woes continued to weigh on European markets

Stocks were mixed Tuesday thanks to meetings scheduled to discuss yet another plan for Greece. Shares were mixed in Asia but advanced in the U.S. They tumbled in Europe.
United States
U.S. stocks swung from losses to modest gains Tuesday as European leaders met to discuss Greece’s strained finances. The Dow Jones industrials were up 0.5%, the S&P added 0.6% and the Nasdaq edged up 0.1%. The gains followed a rebound in commodities markets, which had been weighing down stocks earlier in the day. Commodities including crude oil, copper and gold bounced off their lows in afternoon trading, helping to lift shares of energy companies higher and curb heavy losses in the materials sector.
Greece and its creditors held talks in Brussels to discuss how to keep the country from falling out of the euro. Analysts say Greece has little time left before its banks run out of cash. The European Central Bank has refused to increase the emergency credit the banks need to cope with withdrawals. Greece is expected to submit a formal request for a medium-term assistance program from the European Stability Mechanism rescue fund within hours and Eurozone finance ministers have said they will hold a conference call on Wednesday morning to consider that request.
Horizon Pharma offered about US$2 billion to buy Depomed, a rival pharmaceutical company, in a hostile bid. The Dublin-based company took the offer directly to shareholders after Depomed’s executives reportedly refused to talk about a previous proposal. Horizon declined while Depomed jumped. A warning from Chipmaker Advanced Micro Devices about weak demand for personal computers pushed its shares lower and hurt peers such as Nvidia and Intel.
Gold at the afternoon London fixing was down US$9.75 to US$1,156.25. Copper futures dropped 2.6% to US$2.47. WTI spot crude was up 63 US cents to US$53.61. Dated Brent spot crude was up US$1.01 to US$57.55. The US dollar was up against all of its major counterparts including the euro, yen, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was up 0.5%. The yield on US Treasury 30 year bond was down 5 basis points to 3.04% while the yield on the 10 year note declined by 4 basis points to 2.26%.
Europe
The stock selloff continued Tuesday as concerns over Greece continued to weigh on investor sentiment. European finance ministers meet later today as part of a last-ditch effort to reach a new bailout agreement after Greek voters rejected reform proposals in Sunday’s referendum. The FTSE declined 1.6%, the SMI lost 1.1% and the CAC and DAX were 2.3% and 2.0% lower respectively. Italy’s MIB retreated 3.0% after dropping 4.0% on Monday.
K+S was down on a broker downgrade. Auto makers Daimler, BMW, Volkswagen, Peugeot and Renault also declined. SAP was down despite a broker upgrade. The same was true for Deutsche Börse. Axel Springer surged after reports emerged about discussions with broadcaster ProSiebenSat.1 for a possible combination. ProSiebenSat.1 finished lower. Technip plunged after the oilfield services provider announced a restructuring plan that includes elimination of 6,000 jobs. The company anticipates an even more challenging environment in oil and gas. GKN dropped after the company said Andrew Reynolds Smith, Chief Executive Automotive, intends to step down from the Board on September 25 to take up the role of Smiths Group Plc.’s Chief Executive. Marks & Spencer retreated after the company announced that it will begin a share repurchase program of Marks & Spencer’s ordinary shares of 25 pence each up to a maximum consideration of £90 million. Rolls Royce sank on a broker downgrade. Mining stocks were under pressure due to weakness in precious metal prices. Glencore, Randgold Resources, Anglo American and Fresnillo tumbled.
Germany’s May industrial production remained unchanged from the prior month, The French merchandise trade deficit increased in May due to falling exports and increasing imports. UK industrial output expanded unexpectedly in May on strong oil and gas production. Industrial production rose 0.4% on the month.
Asia Pacific
Stocks were mixed in Asia as investors shrugged off concerns about Greece’s debt situation and waited to hear about another emergency meeting of Eurozone finance ministers scheduled later in the global market day to discuss the fallout from Greece’s bailout referendum. While Australian and Japanese shares led the region’s gains, a further sell-off in Chinese equities and tumbling oil prices weighed on investor sentiment elsewhere across the Asia-Pacific region.
The Shanghai Composite dropped as much as 5% during the trading session before recouping most of its loss to end the session down 1.3%. The Hang Seng surrendered 1.0% after sliding 3.0% the day before. Investors fretted over Greece’s debt woes and the heightened systemic risk in China’s leveraged stock markets.
The Nikkei was up 1.3% after dropping over 2% Monday in reaction to Greece’s ‘No’ vote to bailout conditions. Banks Sumitomo Mitsui Financial, Mizuho Financial and Tokio Marine Holdings advanced. Utility Tokyo Electric Power and Kansai Electric Power soared. Exporters Hitachi, Nikon, Panasonic, Mazda Motor, Kyocera and Sharp advanced aided by a weak yen as risk aversion subsided. Honda Motor slid on a Nikkei report that it will abandon its ambitious fiscal 2016 sales target of selling 6 million cars worldwide.
Australian stocks staged a relief rally after the outcome of the Greek referendum drew only a muted reaction in the U.S. on Monday. The S&P/ASX was up 1.9% and the All Ordinaries added 1.8%. The Reserve Bank of Australia’s rate decision came in line with expectations, offering further support to sentiment. The RBA left the cash rate unchanged at 2.0%, judging that its policy is appropriate for the time being to foster sustainable growth and inflation consistent with the target.
The Kospi retreated 0.7%, dragged down by pharmaceutical and cosmetic companies on expectations of weaker earnings growth in light of the recent MERS outbreak. The Sensex slipped 0.1%.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
The Federal Reserve publishes minutes from its most recent FOMC meeting.
*Note — all releases are listed in local time.