ECONOMY

Greece leads European stocks lower as SYRIZA beefs up lead

European shares snapped a four-day rally on Wednesday with Greeks shares under pressure as anti-bailout party Syriza consolidated its lead ahead of the Jan. 25 general election.

Athens’ general index was down 2.3 percent at 1237 GMT after a survey showed that Syriza, which is running on pledges to end austerity policies and renegotiate Greek debt, has widened its opinion poll lead over the ruling conservatives.

Banks led falls, with Alpha Bank down 7 percent and Piraeus down 3.8 percent. Trading volume in Greece remained subdued at less than 40 percent of the index’s full-day average for the past three months.

“We expect the market to remain nervous as the election date draws nearer, with light volumes to persist,» analysts at Euroxx Securities in Athens wrote in a note.

At 1238 GMT, the FTSEurofirst 300 index of top European shares was down 0.4 percent at 1,417.65 points.

The benchmark index, which hit a seven-year high on Tuesday, surged 5.5 percent in the previous four sessions on expectations the European Central Bank is about to announce sovereign bond purchases to stimulate the inflation.

Money market traders polled by Reuters say the European Central Bank is expected to announce on Thursday a 600 billion euro sovereign bond-buying programme, known as quantitative easing.

“Despite the high volatility, you can tell the market wants to believe that it will work,» Saxo Bank trader Pierre Martin said. «We’re seeing rising appetite for European equities across the board, and European stocks are outperforming Wall Street since the start of the year.”

Shares in Switzerland’s SGS dropped 6.2 percent after the world’s largest testing and inspection company cut its outlook. Peer Intertek fell 5.3 percent.

SGS was the top faller on Zurich’s SMI index, down 2.1 percent.

The SMI is still up 1.4 percent so far this week after falling 14 percent over the last two sessions of last week, following the Swiss National Bank’s shock decision to scrap a cap on the value of the franc against the euro last Thursday.

Some investors were starting to see value in Swiss stocks after the slump. A sample of 48 ETFs tracking Swiss shares recorded net inflows of $705 million in the two days after the SNB’s decision, Markit data showed.

[Reuters]