Europe midday: Stocks shrug off Greek election results
European stocks bounced back after an initial swoon following the stunning victory by Greece's anti-austerity party Syriza on Sunday.
London was the odd one out as commodities took it on the chin. The FTSE-100 was to be seen 0.52% lower at 6,797.53. Market commentary is citing the prospects for lower growth in China – potentially due to instability in the Eurozone – and some distortions on the supply side linked to the fast approaching Lunar New Year.
As of 12:10 the Dax-30 was actually higher by 0.74% to reach 10,727.89, while Spain's benchmark Ibex 35 and Paris's Cac-40 continued to trade nearly unchanged.
The FTSE Mibtel on the other hand was down 0.98% to 20,320.72.
Economists expect little volatility as a result of elections
Syriza won 36.4% of the vote compared to 27.8% for the governing New Democracy party and are projected to win 149 seats versus the 151 needed for a majority on the 300 seat parliament, the German broker added in a note to clients.
Even so, various other economists seemed sanguine that even under a worst case scenario the threat to the Eurozone as a whole was rather limited given the financial reforms put in place over the last few years.
Erik Nielsen, global chief economist at Unicredit Bank AG, wrote: “A disaster scenario, which would lead Greece onto a slippery slope out of the Eurozone, cannot be excluded.
"Breaking with Europe would be a terrible move for Greece – but the rest of the Eurozone, particularly as the ECB has already announced the opening shot of QE, will skate through with only temporary and minor volatility.”
The Eurozone's finance ministers were expected to broach the situation in the Mediterranean country when they met later on Monday.
The yield on Greek 10-year sovereign bonds was higher by 33 basis points higher to 8.77%, albeit after having earlier tapped the 9.28% mark on an intra-day basis.
Following an initial bout of weakness the euro/dollar could be seen higher, appreciating by 0.75% to stand at 1.1230.
Commodities take a hit
Three-month copper futures were down 2.7% to $5,510 per metric tonne out on the LME.
Front month Brent crude futures were falling by -1.2% to $48.21 per barrel on the ICE. The Russian rouble was also registering losses after fighting in Ukraine engulfed the port city of Mariupol over the weekend. As of 11:57 the country’s currency had been knocked lower by 3.05% to 65.65 per dollar.
German businessmen sentiment resilient
The German IFO institute's widely-followed gauge of business confidence, for the month of January, edged slightly past forecasts, rising for a third consecutive month to a level of 106.7 from 105.5 in the month before.
The consensus forecast had been for an increase to 106.3.
The Munich-based think-tank said: “Companies were far more satisfied with their current business situation and the majority was also optimistic about the business outlook.”
Cyclicals turn around, move higher
Within the DJ Stoxx 600 the sharpest gains were to be seen in the following industrial groups: Travel&Leisure (1.17%), Automobiles&Parts (0.96%) and Technology (0.56%).
Belgian supermarket group Delhaize achieved better-than-expected sales growth in the United States in the fourth quarter.
Les Echos revealed on Monday that the family which owns the iconic French department store Galeries Lafayette has increased its stake in supermarket chain Carrefour to 9.5%.
Rolls-Royce was awarded a contract to supply engines for major Chinese locomotive manufacturer CNR Dalian, marking its entry into that country's market for freight locomotives for export.
IAG, the owner of British Airways, will reportedly announce that Irish airline Aer Lingus has accepted its recent takeover bid. The Irish carrier confirmed on Sunday that it was considering a new offer of €2.50 per share in a move which values it at €1.3bn. The FTSE 100 group may, however, faces difficulties getting Irish officials to agree to the takeover.