European stocks slide before Greece talks
Tip News - 2012/08/22       A+ A-

European stock markets slid Wednesdayfollowing losses in Asia and on Wall Street and as investors awaited key talks on Greece's debt woes plus minutes from the US Fed's last monetary policy meeting.

London's benchmark FTSE 100 index of top companies shed 1.05 percent to 5,796.08 points in late morning deals.

Frankfurt's DAX 30 dropped 0.76 percent to 7,034.83 points and in Paris the CAC 40 slipped 0.71 percent to 3,488.49 points.

Milan declined 0.50 percent and Madrid lost 1.13 percent.

"Weaker equity markets across the board in Asia due to disappointing trade data out of Japan and renewed concerns about sharply falling corporate profits in China is also taking a toll on European equity markets... with most major indices handing back yesterday's gains," said ETX Capital trader Markus Huber.

"With once again very little data out in Europe today the spotlight will remain on Greece."

The country's Prime Minister Antonis Samaras on Wednesday called for more time to make spending cuts and reforms to unlock funds to keep the debt-wracked country afloat, two days before Greece's crunch talks in Germany.

"All that we want is a little 'breathing space' to revive the economy quickly and raise state income. More time does not automatically mean more money," Samaras said in an interview with German daily Bild.

Samaras was to meet the head of the Eurogroup of eurozone finance ministers, Jean-Claude Juncker, on Wednesday ahead of a trip on Friday to Berlin to meet German Chancellor Angela Merkel.

He holds talks with French President Francois Hollande on Saturday.

As part of a rescue package with its international creditors, Greece has committed to slashing some 11.5 billion euros from spending over two years from 2013.

Samaras reportedly wants to discuss extending the deadline by two years in his talks in Berlin and Paris.

European stock markets had closed higher on Tuesday and the euro jumped back above $1.24 as investors remained hopeful of central bank action over the eurozone crisis and cheered Spain's latest debt auctions.

With the eurozone still firmly in focus for traders, the euro stood at $1.2475 approaching midday Wednesday in London, up from $1.2470 late on Tuesday in New York, when the single currency reached a seven-week high at $1.2488.

"Optimism in the eurozone has not been the only driving force behind the better tone in the euro against the dollar recently," said Jane Foley, senior currency strategist at Rabobank.

"This month's better than expected US nonfarm payrolls, trade and retail sales data releases has driven optimism about the recovery on the other side of the Atlantic. As a result risk appetite has perked up," she added.

Investors were also waiting for the release of minutes from the Federal Reserve's last monetary policy meeting. Due later Wednesday, the minutes should provide indications as to why the US central bank has shied away from launching a fresh round of economic stimulus in the form of quantitative easing (QE).

"The release of the ... minutes from the August 1 policy meeting is the next prime focus for the markets," said Foley.

"The firmer tone of treasury yields since the start of this month reflects the better US data releases and the simultaneously held view that the Fed may step back from the QE trigger."

In company news Wednesday, shares in BHP Billiton were down 1.69 percent to 1,946.5 pence as the mining giant delayed expansion of its huge Olympic Dam project after posting a near 35-percent slump in annual net profit in a sign the global slowdown is hurting commodities.

The world's biggest miner put plans to grow the copper and uranium mine in Australia on hold after a 15 percent plunge in underlying earnings due to softer prices for most of its products through 2012.

BHP's first profit drop in three years to US$15.42 billion is a significant reversal of fortunes for the company following a record US$23.6 billion profit last year -- the largest ever recorded in Australian corporate history.

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European stocks slide amid Greece talks, Fed minutes