LONDON – Greek shares outperformed their European counterparts Tuesday amid mounting hopes of a breakthrough in the country’s tortuous discussions with creditors. Elsewhere, profit-taking and jitters ahead of a run of U.S. data and the start of the Federal Reserve’s latest policy meeting kept sentiment in check.
In Europe, Britain’s FTSE 100 dropped 1.1 percent to 7,026 while Germany’s DAX declined 1.4 percent to 11,867. France’s CAC 40 sank 1.8 percent to 5,176. Greek shares were faring far better, with the main stock market in Athens up 0.4 percent. Wall Street was set to extend losses, with Dow futures and the broader S&P 500 futures down 0.4 percent.
The decision Monday by Greek Prime Minister Alexis Tsipras to rejig his negotiating team with European creditors appears to have eased concerns that a deal won’t be concluded in time to avoid a default by the country. Tsipras also laid out the hope that a deal will be concluded by May 9, two days ahead of a meeting of eurozone finance ministers.
“We may have to wait for a week or two for the deals to be thrashed out but at least the people in charge of the negotiation process are now experienced in these kinds of discussions,” said Craig Erlam, senior market analyst at OANDA. “It makes a deal far more likely in time for the next eurogroup meeting which takes place on 11 May.”
One of the clearest indicators of the improving Greek backdrop has been the rise of the euro. It’s up 0.6 percent at $1.0939, stoking talk that it could break above $1.10 for the first time since mid-March.