June 30, 2015

GLOBAL MARKETS CALMER ON A DECISIVE DAY FOR GREECE

Posted by The Himalayan Voice:
[In Athens, the Greek finance minister, Yanis Varoufakis, told reporters that Greece would not make the I.M.F. payment. But when asked whether there was still a chance that Athens would reach an aid deal with its creditors before Tuesday’s other key deadline — the midnight expiration of the country’s bailout program — Mr. Varoufakis replied, “We hope so.” No deal materialized, however.]

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A statue of the goddess Athena in Athens. Greece is struggling to avert bankruptcy.

Credit Aris Messinis/Agence France-Presse — Getty Images

PARIS — Global stock markets stabilized on Tuesday as hope arose that Prime Minister Alexis Tsipras of Greece might still reach a last-minute deal with his country’s international creditors, but Athens missed a deadline for a critical loan repayment to the International Monetary Fund.
Markets fell across the world on Monday, after the Greece government said that a referendum would be held Sunday on whether to accept the bailout terms offered by the so-called troika of international lenders: the I.M.F., the European Central Bank and a group representing European Union member states. On Tuesday, Greece was supposed to have repaid roughly 1.6 billion euros, or $1.8 billion, to the I.M.F.
In Athens, the Greek finance minister, Yanis Varoufakis, told reporters that Greece would not make the I.M.F. payment. But when asked whether there was still a chance that Athens would reach an aid deal with its creditors before Tuesday’s other key deadline — the midnight expiration of the country’s bailout program — Mr. Varoufakis replied, “We hope so.” No deal materialized, however.
European markets declined at the opening, but expectations fanned by rumors in Brussels and Athens that Greece was preparing to propose a compromise led investors to square their bets as the day wore on, leaving indexes little changed.
“The big news today is that they’re still talking,” said Ronny Claeys, a strategist at KBC Asset Management in Brussels. “That’s enough to calm the market.”
American markets also stabilized. The Dow Jones industrial average gained 23 points, or 0.1 percent, to 17,619.15. The Standard & Poor’s 500-stock index gained 5 points, or 0.3 percent, to 2,063.11. The Nasdaq composite index climbed 28 points, or 0.6 percent, to 4,986.87.
Still, despite Monday’s slump, the S.&P. 500 remains only about 3 percent below its record close of 2,130.82 set May 21, and many investors remain confident the United States economy will maintain its recovery.
The Euro Stoxx 50 index, which combines the shares of top companies in Germany, France and other countries in the eurozone, closed down 1.3 percent on Tuesday, after a 4.2 percent decline on Monday. In London, the benchmark FTSE 100 index fell 1.5 percent, after a 2 percent decline the previous day.
Earlier on Tuesday, Asian markets bounced back strongly. In China, where key indexes have gained more than 100 percent over the past year, the Shanghai composite index rose 5.6 percent, after falling more than 3 percent on Monday. The Tokyo benchmark Nikkei 225 stock average rose 0.6 percent.
With investors focused on the crisis in Greece, there was little market reaction to official data on Tuesday that showed consumer prices in the eurozone had risen 0.2 percent in June compared with a year earlier, and that the jobless rate in the same group of countries was little changed at 11.1 percent in May.
The bond market calmed after deep declines on Monday in which investors dumped the sovereign debt of so-called peripheral eurozone countries like Italy, Portugal and Spain, which are seen as the most vulnerable to market turmoil if Greece defaults. On Tuesday, bond yields, which move in the opposite direction to prices, fell across most of the eurozone as tensions eased.
The exception was the debt of Greece itself, which continued to trade at elevated levels.
The yield on the 10-year Treasury note rose to 2.35 percent from 2.33 percent a day earlier.
In currency trading, the euro was down 0.9 percent at $1.1147 while the dollar fell 0.07 percent to 122.39 yen.
The price of oil rose for the first time in a week as negotiations with Iran over its nuclear program were extended, potentially delaying a return if Iranian crude to the market.
Benchmark United States crude rose $1.14 to settle at $59.47 a barrel in New York. United States crude finished the month down 83 cents, or 1.4 percent. Brent crude, a benchmark for international oils used by many United States refineries, rose $1.58 to $63.59 a barrel in London.
Metals futures ended lower. Gold fell $7.20 to $1,171.80 an ounce, silver lost 11 cents to settle at $15.55 an ounce and copper fell two cents to $2.62 a pound.
In other energy futures trading on the Nymex, wholesale gasoline rose 6 cents to close at $2.090 a gallon; heating oil rose 5 cents to close at $1.887 a gallon; and natural gas rose 2.7 cents to close at $2.832 per 1,000 cubic feet.
Niki Kitsantonis contributed reporting from Athens.

@ The New York Times