Greek shares outperform amid bailout deal hopes
LONDON (AP) — Greek shares outperformed their European counterparts Tuesday amid mounting hopes of a breakthrough in the country’s tortuous discussions with creditors. Elsewhere, profit-taking and jitters ahead of a run of U.S. data and the start of the Federal Reserve’s latest policy meeting kept sentiment in check.
KEEPING SCORE: In Europe, Britain’s FTSE 100 dropped 1.1 percent to 7,026 while Germany’s DAX declined 1.4 percent to 11,867. France’s CAC 40 sank 1.8 percent to 5,176. Greek shares were faring far better, with the main stock market in Athens up 0.4 percent. Wall Street was set to extend losses, with Dow futures and the broader S&P 500 futures down 0.4 percent.
GREEK HOPES: The decision Monday by Greek Prime Minister Alexis Tsipras to rejig his negotiating team with European creditors appears to have eased concerns that a deal won’t be concluded in time to avoid a default by the country. Tsipras also laid out the hope that a deal will be concluded by May 9, two days ahead of a meeting of eurozone finance ministers.
ANALYST TAKE: “We may have to wait for a week or two for the deals to be thrashed out but at least the people in charge of the negotiation process are now experienced in these kinds of discussions,” said Craig Erlam, senior market analyst at OANDA. “It makes a deal far more likely in time for the next eurogroup meeting which takes place on 11 May.”
EURO BUOYANT: One of the clearest indicators of the improving Greek backdrop has been the rise of the euro. It’s up 0.6 percent at $1.0939, stoking talk that it could break above $1.10 for the first time since mid-March.
BRITISH GDP: One of the reasons why European markets labored Tuesday is the news that Britain’s economic growth slowed to a quarterly rate of 0.3 percent in the first three months of this year. That’s half the rate recorded in the last quarter of 2014, raising concerns that one of the motors of the European recovery is running out of steam.
FED WATCH: Much of the focus over the coming two days will be on the Fed’s meeting. During the two-day meeting, which ends Wednesday, policymakers are set to discuss when the Fed should start raising interest rates again. After its March meeting, the Fed opened the door to a rate increase this year by no longer saying it would be “patient” in starting to raise its benchmark rate. But weak economic data recently might complicate that picture.
US DATA: A monthly gauge of consumer confidence from the Conference Board, due later, will be digested in the context of Fed expectations. The U.S. government also releases its estimate of economic growth in the January-March quarter. Gross domestic product is expected to have risen by an annualized rate of 1 percent, down from 2.2 percent in the previous quarter.
ASIA’S DAY: Japan’s Nikkei 225 outperformed the region, gaining 0.4 percent to 20,058.95. Other markets were weaker with Hong Kong’s Hang Seng flat at 28,442.75. South Korea’s Kospi shed 0.5 percent to 2,147.67. Australia’s S&P/ASX 200 fell 0.6 percent to 5,948.50. Stocks in mainland China and Southeast Asia were weaker.
ENERGY: Benchmark U.S. crude declined 21 cents to $56.78 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, fell 30 cents to $64.53 in London.