HONG KONG – European shares retreated and Wall Street was expected to dip on the open Monday as hopes were low for an imminent deal on Greece’s bailout.
Earlier, Chinese stocks led Asian benchmarks higher after the country’s central bank cut interest rates for the third time in six months, hoping to reinvigorate growth in the world’s No. 2 economy.
KEEPING SCORE: France’s CAC 40 was down 1.3 per cent at 5,024.30 and Germany’s DAX shed 0.4 per cent to 11,665.18. Britain’s FTSE 100 edged up 0.2 per cent to 7,058.02. Futures augured losses on Wall Street after the U.S. stock market ended last week with its best day in two months on good news about the job market. Dow and S&P 500 futures were both down almost 0.1 per cent.
EUROPE MEETING: Eurozone finance ministers will meet later in the day to try to speed up talks on a bailout deal for Greece. Expectations are slim, however, for a firm agreement Monday that will get Greece the final 7.2 billion euro ($8.1 billion) installment of its 240 billion euro bailout program. The country needs money to meet expenses in coming weeks, though experts expect it to be able to make a big debt repayment to the International Monetary Fund on Tuesday. A debt default would destabilize Greece, potentially causing it to fall out of the eurozone.
CHINA CUT: On Sunday, the People’s Bank of China cut interest rates for the third time in half a year in a fresh bid to shore up sputtering economic growth. The central bank’s latest move came after trade data released on Friday showed imports and exports declined in April suggesting domestic and foreign demand are slowing. At the same time, inflation remains low, giving policymakers leeway to ease monetary policy as they strive to keep growth from falling below a 7 per cent target.
ASIA SCORECARD: The Shanghai Composite Index in mainland China jumped 3 per cent to 4,333.58 and Japan’s Nikkei 225 rose 1.3 per cent to 19,620.91. South Korea’s Kospi gained 0.6 per cent to 2,097.38 and Hong Kong’s Hang Seng added 0.5 per cent to 27,718.20. Australia’s S&P/ASX 200 dipped 0.2 per cent to 5,625.20. Markets in Southeast Asia mostly rose.
THE QUOTE: With their latest easing move, China’s policymakers are trying to walk a fine line between stimulating the economy and avoiding adding even more froth to China’s stock market, which has more than doubled in the past year, analysts said. “It’s only a quarter per cent cut, which on one hand leaves room for a lot more aggressive move,” said Nicholas Teo, analyst at CMC Markets in Singapore. “On the other hand we’ve seen potential for asset inflation in the market itself, so I think they came out with the best they could at this point in time and maybe buy themselves a bit more time.”
ENERGY: Benchmark U.S. crude slipped 29 cents to $59.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 45 cents to close at $59.39 a barrel on Friday.
CURRENCIES: The dollar strengthened to 119.91 yen from 119.79 in late trading Friday. The euro slipped to $1.1145 from $1.1223.