European stocks muted before EU meeting

Europe’s main stock markets were muted in morning deals on Monday as EU finance ministers were to sign off Greece’s new bailout at a Brussels meeting, while traders also digested weak Chinese data.

London’s benchmark FTSE 100 index of leading shares was flat at 5,887.38 points, Frankfurt’s DAX 30 won 0.36 percent to 6,904.69 points and in Paris the CAC 40 edged up 0.08 percent to 3,490.39.

In foreign exchange trading, the European single currency rose slightly to $1.3124 from $1.3120 late in New York on Friday.

“Equity markets this morning awoke to a slightly larger wall of worry to climb than they left on Friday afternoon, with Asia’s superpower spluttering once again in the face of a now established trend of softer economic performance,» said Spreadex trader David White.

“China’s trade deficit widened to a level not seen in 22 years, as export growth failed to match expectations (…) A quickening US recovery could well be offset by a slowing Chinese economy to some extent, but with an accommodative central bank and growth likely to continue, deflationary concerns are unlikely to present more concern than they already have near-term.”

Leading indicators from the Organization for Economic Cooperation and Development pointed to signs of firmer activity in the eurozone but below trend performance by China and Brazil.

Eurozone finance ministers were meanwhile to meet on Monday in Brussels to give their final approval to the second Greek bailout and discuss tightening measures to prevent a repetition of the crisis.

The ministers were expected to sign off on the 130 billion euro ($171 billion) rescue programme after Greece’s private creditors approved wiping off some 100 billion euros from Athens’ debt.

“The euphoria over Greece narrowly avoiding a default … has already been priced in and it appears that Athens has been taken care of for now,» said Kathleen Brooks, research director at trading group

“Going forward the focus for markets may keep risk assets slightly muted as investors price in the prospect of missed fiscal targets and weak growth in some of the peripheral (eurozone) countries» — notably Spain. [AFP]

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