As EU finance ministers meet in Brussels to resume talks about Greek aid, European stocks decline modestly.
European stocks slipped slightly into the red on Monday as EU finance ministers met in Brussels to discuss possible solutions to the Greek sovereign debt crisis (NYSEARCA:VGK). Reports indicate a rift between IMF officials, who recommend a writedown of Greek debt and German representatives, who oppose such an approach. Because Germany’s elections are scheduled for 2013, it is expected that any agreement reached by the finance ministers would involve some form of “kicking the can down the road” until after Germany’s elections. In the mean time, Greece is still waiting for the release of a tranche of €31.5 billion in loans, which has been upheld for two weeks (NYSEARCA:GREK).
Istat reported that Italian consumer confidence declined in November from 86.2 to 84.8 (NYSEARCA:EWI).
As of 11:15 EST, the Euro STOXX 50 Index declined 0.67 percent to 2,540 – staying above its 50-day moving average of 2,510 (NYSEARCA:VGK). The FTSE 100 Index dropped 0.72 percent to 5,777 (NYSEARCA:EWU). The German DAX Index declined 0.31 percent to 7,286 (NYSEARCA:EWG). France’s CAC 40 Index sank 0.87 percent to 3,498 (NYSEARCA:EWQ). Spain’s IBEX 35 Index fell 0.46 percent to 7,873 (NYSEARCA:EWP). Italy’s FTSE MIB Index declined 0.65 percent to 15,535 (NYSEARCA:EWI).
As of 11:24 EST, the euro declined 0.11 percent against the dollar, trading at $1.2959 (NYSEARCA:FXE). Important Week for the Euro
El Pais reported that Spain’s economy minister, Luis De Guindos confirmed that the nation would request €40 billion in aid for its troubled banks (NYSEARCA:EWP). The amount would come from a €100 billion aid package which was approved in June to rescue the nation’s banking sector.
Italy’s ten-year bond yield declined to 4.78 percent on Monday from Friday’s closing level of 4.82 percent (NYSEARCA:EWI).
December Gold futures declined by $2.80 (0.16 percent) to $1,748.60 per ounce (NYSEARCA:GLD). Gold Futures Little Changed Near 6-week High Ahead of EU Talks
In China, stocks declined in anticipation of Tuesday’s release of industrial profits from the nation’s Bureau of Statistics. The Shanghai Composite Index declined 0.49 percent to 2,017 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index dipped 0.24 percent to 21,861 (NYSEARCA:EWH).
In Japan, stocks advanced as the yen fell (NYSEARCA:FXY) for a now-familiar reason: the nation’s Liberal Democratic Party is expected to win the December election, after which point, the party’s leader, Shinzo Abe will pressure the Bank of Japan to loosen monetary policy. The Nikkei 225 Stock Average advanced 0.24 percent to 9,388 (NYSEARCA:EWJ).
American stock index futures were in negative territory ahead of Monday’s opening bell, as investors feared that stumbling blocks in the fiscal cliff negotiations could adversely impact stock prices. The December 12 Dow Jones Industrials future declined 0.31 percent to 12,921 as of 9:14 EST. The December 12 S&P 500 future fell 0.38 percent to 1,400 (NYSEARCA:SPY). The December 12 Nasdaq 100 future dipped 0.08 percent to 2,632.
Bottom line: The major European stock indices retreated on Monday as European Union finance ministers met in Brussels to resume contentious negotiations for agreeing on solutions for the Greek sovereign debt crisis.