European stocks close lower

Reported by AAP
Tuesday, February 10, 2015
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European stock markets have sunk after Greek Prime Minister Alexis Tsipras vowed to stand by his anti-austerity electoral promises, fanning fresh fears over Greece's possible exit from the eurozone.

London's FTSE 100 index dipped 0.24 per cent to end the day at 6,837.15 points, with HSBC shares sliding on claims that its Swiss banking division had helped rich clients dodge taxes.

Elsewhere, Frankfurt's DAX 30 index shed 1.69 per cent to 10,663.51 points and in Paris the CAC 40 reversed 0.85 per cent to 4,651.08 compared with Friday's close.

In foreign exchange activity, the euro stabilised to $US1.1320 from $US1.1316 late in New York on Friday.

Markets were reacting to a speech by Greece's new leftist Prime Minister Alexis Tsipras over the weekend.

"Tsipras clearly indicated that he won't be going back on any of his election campaign promises regarding reversing austerity measures," said analyst Markus Huber at brokerage Peregrine & Black.

"With an emergency meeting concerning the situation in Greece by the eurozone only two days away, chances appear rather slim for a compromise, which heightens the risk of a possible Greek default and exit out of the euro in just a few months from now."

The Athens stock market closed down nearly five per cent as investors feared that Greece's refusal to apply for a bailout extension would set it on a path that could end with it exiting the eurozone.

Greece was locked Monday in intense talks with its EU partners after the country's prime minister stuck to his anti-austerity guns with the deadline for a deal needed to avoid the risk of default just days away.

In a rousing speech to parliament, Tsipras on Sunday pledged he would be "unshakeable" in implementing his electoral promises and refused to apply for an extension to the much-loathed 240 billion euro ($A348 billion) bailout.

On Monday, Tsipras said on a visit to Vienna that he was "optimistic" about reaching a deal with the European Union as "there is a common desire to resolve this crisis".

But German Finance Minister Wolfgang Schaeuble warned the Greeks that "if they want our help, there needs to be a program" agreed with creditors, rather than the emergency assistance that Athens has called for.

The European Commission's representative for the EU-IMF-ECB troika and head of the Euro Working Group were in Athens for talks with the finance ministry in a bid to thrash out a last-minute deal ahead of the emergency meeting of eurozone finance ministers on Wednesday.

"As all eyes are turning to the upcoming extraordinary Eurogroup meeting on Wednesday, we could expect high volatility across equity and commodity markets as European leaders are likely to urge governments to do all they can in order to prevent the Greek debt crisis from escalating and getting out of control," said Myrto Sokou, senior research analyst at Sucden Financial.

Concerns over Greece also edged US stocks lower on Monday.

In mid-day trading in New York, the Dow Jones Industrial Average was down 0.24 per cent to 17,781.58 points, while the S&P 500 slipped 0.09 per cent to 2,053.63 points and the tech-rich Nasdaq Composite Index slid 0.07 per cent to 4,740.88 points.

Back in London, HSBC bank shares dropped 1.64 per cent to close at 610.60 pence on claims Monday that its Swiss division helped wealthy customers dodge millions of dollars in taxes after a "SwissLeaks" cache of secret files emerged online.

The documents, published over the weekend, claim the bank helped clients in more than 200 countries evade taxes on accounts containing $US119 billion.

HSBC's Swiss banking arm insisted it has since undergone a "radical transformation" to prevent its services being used to evade taxes or launder money.

The huge cache of files stolen by an IT worker in 2007 and passed to French authorities has sparked criminal probes in several countries and attempts to claw back cash.

In Asia on Monday, investor sentiment was also hurt by poor Chinese economic data, which fanned worries over the faltering Asian powerhouse.

China on Sunday said exports fell 3.2 per cent year-on-year in January. Imports plunged 19.7 per cent - the largest drop in five years - owing to lower commodity prices and sluggish domestic demand.

The figures are the latest illustration of China's slowing economy, which in 2014 expanded at its slowest rate in 24 years.

28/02/2015 16:19Sydney, Australia. 28 February,2015
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