European stock indices respond to report that EU finance ministers plan to delay their decision to approve the next bailout tranche to Greece.
The major European stock indices declined again on Thursday, following the publication of a report, which was published after the European markets closed on Wednesday. An EU official – speaking on condition of anonymity – informed an American reporter that the decision to release the next tranche of bailout funds to Greece might not be made until the final days of November. The €31.5 billion payment had been expected for next week, assuming that the Greek Parliament would have approved its 2013 budget on Sunday (NYSEARCA:GREK). The “troika” of lenders to Greece(the European Union, the European Central Bank and the IMF) had been scheduled to meet on Monday and approve payment of the next bailout tranche. Although the American stock indices gave up Wednesday’s early gains after the report, the European markets did not have the opportunity to respond to the news until Thursday’s session began. European stocks began to slowly climb back at 8:00 EST (NYSEARCA:VGK).
In Germany, Destatis reported that the nation’s Consumer Price Index increased 2.1 percent on a year-over-year basis (NYSEARCA:EWG).
The French National Institute of Statistics, INSEE reported that manufacturing output declined by 3.2 percent in September after a 2.1 percent increase in August. Output decreased in industry as a whole by 2.7 percent. On a year-over-year basis, manufacturing output decreased by 1.9 percent (NYSEARCA:EWQ).
As of 11:03 EST, the Euro STOXX 50 Index advanced 0.18 percent to 2,483 (NYSEARCA:VGK). The FTSE 100 Index crept upward by 0.08 percent to 5,780 (NYSEARCA:EWU). The German DAX Index fell 0.41 percent to 7,175 (NYSEARCA:EWG). France’s CAC 40 Index climbed 0.60 percent to 3,428 (NYSEARCA:EWQ). Spain’s IBEX 35 Index advanced 0.41 percent to 7,655 (NYSEARCA:EWP). Italy’s FTSE MIB Index declined 0.03 percent to 15,190 (NYSEARCA:EWI). Trend Shift Underway for Emerging Markets
As of 11:08 EST, the euro declined 0.27 percent against the dollar, trading at $1.2712 (NYSEARCA:FXE).
Spain’s ten-year bond yield dipped to 5.83 percent on Friday from Thursday’s closing level of 5.85 percent. Spain’s two-year bond yield declined to 3.10 percent on Friday from Thursday’s closing level of 3.17 percent (NYSEARCA:EWP).
Italy’s ten-year bond yield declined to 5.01 percent on Friday from Thursday’s closing level of 5.03 percent (NYSEARCA:EWI).
On London’s ICE Futures Europe Exchange, January futures for Brent crude oil declined by 35 cents (0.33 percent) to $106.11/bbl. (NYSEARCA:BNO, NYSEARCA:USO).
China’s National Bureau of Statistics disclosed that the nation’s consumer price index (CPI) dropped to a 33-month low of 1.7 percent in October from 1.9 percent in September and 2 percent in August. On a month-over-month basis, China’s CPI declined 0.1 percent from September. The prices of consumer goods decreased 0.2 percent, and the prices of services increased 0.2 percent. The nation’s retail sales increased 14.5 percent on a year-over-year basis. The Shanghai Composite Index dipped 0.12 percent to 2,069 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index declined 0.85 percent to 21,384 (NYSEARCA:EWH). Forget China, Buy these Emerging Market ETFs Instead
In Japan, stocks declined as the yen strengthened following the report that the Greek bailout would be delayed, causing the euro to fall (NYSEARCA:FXY). The Nikkei 225 Stock Average sank 0.90 percent to 8,757 (NYSEARCA:EWJ).
American stock index futures were in negative territory ahead of Friday’s opening bell, as news of the Greek bailout delay rattled European markets. The December 12 Dow Jones Industrials future declined 0.43 percent to 12,720 as of 9:12 EST. The December 12 S&P 500 future fell 0.31 percent to 1,371 (NYSEARCA:SPY). The December 12 Nasdaq 100 future dipped 0.03 percent to 2,571.
Bottom line: The major European stock indices recovered from their earlier declines, which resulted from a report that the European Union would delay its decision to release the next bailout tranche to Greece until the end of November.