Europe close: IMF warns on sustainability of Greek debt
European stocks finished the session moderately lower after the IMF warned that Greece´s debt burden may be unsustainable and following a weaker than expected reading on the state of the US jobs market.
The benchmark Stoxx Europe 600 index ended the session lower by 0.42%, France’s CAC 40 retreated 0.98% and Germany’s DAX by another 0.73%. Spain’s IBEX 35 closed the day down by 0.60% and Italy’s FTSE Mib was 1.43% weaker.
The euro, meanwhile, was up 0.34% against the greenback at $1.1094.
Greece hogged the limelight yet again, as the country’s finance minister Yanis Varoufakis said he would resign if Greeks voted ‘yes’ in the referendum.
He said that if Greeks were to vote that way, which he does not expect, the Greek government would find a way to reach an agreement with creditors.
Later in the afternoon, in its annual Financial Stability report the International Monetary Fund said Greece may require a haircut on its debt in order to make it sustainable.
Acting as a backdrop, the US Bureauof Labour Statistics reported that only 223,000 new jobs were created in June (consensus: 233,000).
On the corporate front, shares in Spanish travel technology provider Amadeus IT Holding rose after the company said it has agreed to pay $830m for Accenture’s Navitaire unit.
On the downside, Electrolux fell sharply after US antitrust officials filed a lawsuit to block the sale of General Electric’s appliance business to the Swedish company, saying the $3.3bn deal would result in higher prices for US consumers.
In London, Lloyds Banking Group was in positive territory after announcing that the government has cut its stake in the bank to 15.9% from 16.87%, as it moves towards full privatisation.
Meanwhile, housebuilder Persimmon rose after it said first-half revenues increased 12% due to higher selling prices and higher volumes of new home sales.
Earlier, figures released by Eurostat showed that industrial producer prices in the Eurozone were stable in May compared with April, but down 2% on the year, in line with expectations, following a 2.1% drop in April.