Updated on
Summary Most European shares fell on Monday before a key eurozone finance meeting.
Londons FTSE 100 index slipped by 0.75 percent to 5,620.34 points in afternoon trading, Frankfurts DAX 30 was off by 0.26 percent to 6,393.53 points and in Paris the CAC 40 edged 0.39 percent lower to 3,155.67.Madrids benchmark IBEX 35 index of leading shares gave up 0.72 percent to 6,690.40 points but Romes FTSE Mib gained 0.35 percent to 13,779.68.In New York, US stocks were mixed in opening trade Monday also owing to more weak signals on the economies of Japan and China.In the first five minutes of trade the Dow Jones Industrial Average was down 0.14 percent to 12,754.84 points.The S&P 500 lost 0.05 percent to 1,354.00, while the tech-rich Nasdaq added 0.15 percent to 2,941.86.The S&Ps weakness came in response to weak economic readings out of China and Japan, according to the Hightower Report.In China, data showing the rate of inflation slowed in June opened the door to new government action to boost growth.However, the news failed to lift markets amid fears that indicators later this week will show more evidence of a slowdown.Hong Kong closed 1.88 percent lower, Shanghai dived 2.37 percent and Tokyo lost 1.37 percent in value. Japanese shares were hit by poor domestic data.Later on Monday, eurozone finance ministers are to meet under pressure to push ahead quickly with measures to tackle the regions sovereign debt crisis, as market sentiment veers towards the sceptical once again.Investors remain highly anxious that the eurozone debt crisis, which has already sunk Ireland, Greece and Portugal, could spread to Spain and Italy.In a gloomy omen, the price Spain must pay to borrow for 10 years rose sharply to 7.033 percent on Monday, from 6.912 percent late on Friday.And the European single currency dived to $1.2251 in Asian trade, hitting the lowest point since July 1, 2010. It stood later at $1.2292.Eurozone finance ministers meet in Brussels, ostensibly to build on the decisions announced at the summit two weeks ago, said IG Index analyst Chris Beauchamp.As if to underline the urgency of their discussions, yields for Spanish and Italian bonds are on the march again, although this latest meeting is likely to end with a statement of intent but little else.European leaders had hailed a June 28-29 EU summit as a breakthrough, promising fresh capital for Spains struggling banks, a European bank union to keep the lenders in line and making it easier for the blocs new bailout fund to help countries in trouble.But after an initially euphoric response, investors have switched tack, pushing Spanish long-term borrowing costs back up to the kind of sky-high rate which forced Greece, Ireland and Portugal into massive EU-IMF bailout deals.Ministers will meet today in Brussels and high on the agenda will be clarifying in some degree the details of what was agreed at the EU leaders summit at the end of June, said economist Derek Halpenny at The Bank of Tokyo-Mitsubishi UFJ in London.The initial response was positive, but a lack of detail has resulted in confidence ebbing away and yields in Spain and Italy are at or higher than (levels) before the summit.Responding to the turn of events, Spanish Prime Minister Mariano Rajoy announced on Saturday that Madrid would take additional steps soon to cut its public deficit and called for progress on the summit measures.What will really determine their success is that they turn into concrete realities, in a supple, quick and effective way, Rajoy said, adding: Europe must fulfill the accords as swiftly as possible.French Finance Minister Pierre Moscovici said Mondays meeting would translate into action the summit decisions but added that there would be another gathering in July, on July 20 I think.As the positive gloss on the June 28-29 summit wears thin, International Monetary Fund chief Christine Lagarde warned Friday that the global economy was slowing because Europe is not doing enough to fix the debt crisis.
