THE EUROPEAN MARKETS OPEN AFTER FALLING GREEK VOTE
PARIS / LONDON (Reuters) – European shares opened lower Monday, especially in the periphery of the eurozone, erasing some of their gains from last week in the fear that the election results in Greece resulted in a conflict with the country’s donors and further instability in Europe.
The leader of the radical leftist Alexis Tsipras promised Sunday night to end five years of austerity, “humiliation and suffering” imposed by international creditors of Greece after the victory of his party, SYRIZA, during these early parliamentary elections.
This is the first time in the European Union a leader openly hostile to the required austerity policies of the EU and the International Monetary Fund (IMF) took the reins of power in a member country.
“The Tsipras about last night left no doubt, to the extent that he said that the troika and the bailouts were in the past,” said Michael Hewson, market analyst at CMC Chief Markets.
“We can be pretty sure that these negotiations will be closely monitored by anti-austerity movements in Spain, Portugal, Italy and France who want to see what Greece can get leaders EU on debt and on the conditions of the bailout. ”
The euro weakened by the broad plan of asset purchases announced by the European Central Bank (ECB) last week hit a new low of 11 to 1.1098 dollar, before rising to 1.1233 dollar in early trading hours, some investors chose to take profits.
In Paris, the CAC 40 lost 0.45% to 4619.98 points into 9:30 after taking nearly 6% last week. In Frankfurt, the DAX yield 0.13%, and in London the FTSE drops 0.59%. The Euro Stoxx 50 index of eurozone folds of 0.44% and the FTSE 300 0.36%.
The Lisbon Stock Exchange lost 1.32%, 1.22% that of Milan and Athens fall of 4.61%.
Basic Resources sectors (-2%), energy (-1.3%) and banking (-1.2%) show the largest declines, while distribution virtually stable thanks to the Belgian Delhaize.
Coeuré Benedict, a member of the ECB Executive Board, sought to allay concerns by stating that Europe was in a process of dialogue with Greece, which must repay debts, adding that a rescheduling them was not excluded.
For its part, the European Commissioner for the Digital Economy, Günther Oettinger, a German representatives at the Commission in Brussels, held that a restructuring of Greek debt would be a bad signal sent to the other States of the euro area.
BACKGROUND TREND
Values, the Belgian Delhaize large distribution group wins 4.9% after reporting a higher sales growth expectations the United States in the fourth quarter and a decrease of weaker than expected sales in Belgium.
Sika advance of 4.8%. Its board of directors has voted Monday for a limitation of voting rights of the Burkard-Schenker family, the controlling shareholder of Swiss chemical group.
Aer Lingus gains 3% after confirming consider a new purchase offer International Consolidated Airlines Group (IAG) (-1.5%), which now offers 2.55 euros per share, EUR 1.3 billion in total, to use the Irish airline.
CAC 40 lost 1.95% ArcelorMittal and Aperam 5.1% following the announcement that steel production of the main Chinese region in this area fell by 0.6 % last year, which has forced several smelters to cut production.
In the bond market, yields on Greek and Italian debt back sharply after the biggest win of Syriza than expected, while the German Bund yield fell to the lowest, 0.302%. The Bund advantage of his sanctuary status in a context of uncertainty.
The consensus in the markets remains, however, that the increased pressure on Greece should not affect the trend beyond the initial shock.
Unlike the situation at the height of the debt crisis in 2011 and 2012 euro, European banks have limited exposure to Greece and the European authorities have put in place mechanisms to avoid a contagion effect in the event of a crisis in one country in the euro area.
“At the moment, the possibility that Greece out of the euro zone, even with the new government is weak” says Sebastien Galy, an analyst on the foreign exchange market at Societe Generale in New York.
The injection BCE plan of at least 1.140 billion euros in the European banking system still further support the trend.
Oil resumed its decline after a brief rebound due to the uncertainty of the death of King Abdullah of Saudi Arabia and the throne of his brother Salman . Brent crude lost 1.6% to $ 48.
After the ECB, investors will be suspended this week with announcements from the US Federal Reserve after its monetary policy meeting. They expect it declares Wednesday, after two days of meetings, that global economic risks will undermine the recovery or the Atlantic nor its own monetary projects.
(With Blaise Robinson, Juliette Rouillon for the French service, edited by Veronique Tison)
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