European stocks drop further ahead of Greek talks

LONDON - Agence France-Presse

REUTERS photo

Europe’s main stock markets fell on July 7 awaiting more high-level talks on the Greek crisis and following heavy losses the day before.

After rising at the open, indices turned red as Frankfurt’s DAX 30 dropped 0.56 percent to 10,829.62 points compared with Monday’s close.

The CAC 40 in Paris slid 0.71 percent to trade at 4,678.16 points in early afternoon deals and London’s FTSE 100 index lost 0.16 percent to 6,525.04 points.

Stock indices had slumped on July 6, with Paris shedding 2.0 percent in value, after Greek voters rejected creditors’ austerity demands in a weekend referendum, sparking new fears that it would crash out of the eurozone.

In foreign exchange on July 7, the euro fell to $1.0958 from $1.1057 late in New York on July 6.

“The euro is again sharply lower today (against the dollar) as investors await fresh news from Greece,” said Fawad Razaqzada, technical analyst at trading site Forex.com.

“Any positive headlines regarding Greece leading up to a potential deal could support the euro,” he added.
 On July 7, eurozone leaders were due hold an emergency summit to discuss the fallout of the referendum that saw Greeks vote ‘No’ to austerity reforms demanded by Athens’ creditors in return for bailout funds.

Late on July 6, the leaders of Germany and France, the eurozone’s biggest economies, presented a united front, calling on Greek Prime Minister Alexis Tsipras to make “precise” proposals in order to revive bailout talks.

Britain is not part of the eurozone but counts the single currency bloc as its main trading partner.

“Today will no doubt be dominated by events in the eurozone, as a meeting of finance ministers is trumped by a summit where heads of state discuss the fallout from the Greek referendum,” said Joshua Mahony, market analyst at IG trading group.
  
“Unfortunately, while the Greeks are expected to present a new plan to help pull the Greek economy back from the brink, it is unlikely that Sunday’s referendum will have swayed the creditors to the extent that their ‘red lines’ have moved enough to get a deal across the line. The two sides arguably seem further away than ever,” he added.

European leaders have warned Tsipras to present new credible bailout proposals at the emergency summit or risk leaving the euro.