Global Markets Subdued as Greek Bank Withdrawals Gather Pace

Nichole Harper
19 Jun, 2015
New York City

Global markets and U.S. stocks edged lower after investors worried that Greece may be inching towards a debt default. More than 4 billion euros left Greek banking system this week. Crude oil prices eased after the U.S. shale output remained strong despite the recent price collapse.

[R]1:10 PM – Global markets and U.S. stocks edged lower after investors worried that Greece may be inching towards a debt default. More than 4 billion euros left Greek banking system this week. Crude oil prices eased after the U.S. shale output remained strong despite the recent price collapse.[/R]

Global markets turned cautious as the deadline for Greek debt repayment approached and the euro eased.

After the collapse of Greek debt negotiations, investors have been jittery and seeking safe haven assets but most investors have been calm.

Greeks accelerated withdrawing money from the banking system and on Friday alone pulled out more than one billion euro and more than 4.5 billion euros in the week, according to local newspapers.

U.S. and German government bond yields declined and the euro edged lower today, indicating some investors are still worried about the combustible nature of the Greek crisis.

On Wall Street, Tollbooth Strategy Index slid 10.50 to 10,857.98.

S&P 500 index fell 0.3% or 5.46 to 2,115.74 and the Nasdaq Composite Index slid 0.2% or 10.05 to 5,122.89.

Crude oil in New York dropped $1.27 to $59.18 a barrel and gold slipped $2.50 to $1,199.50 an ounce.

U.S. Movers

KB Home ((KBH)) soared 7.8% or $1.18 to $16.14 after the homebuilder said revenues in the second-quarter ending in May climbed 10% to $623 million from a year ago period.

Net income in the quarter tumbled 63.9% to $9.6 million or 10 cents per diluted share compared to $26.6 million or 27 cents from the same quarter last year.

Red Hat Inc ((RHT)) increased 1.7% or $1.38 to $79.88 after the open source software developer reported revenues in the first-quarter ending in May soared 14% to $481 million from a year ago period.

Net income in the quarter surged 27.6% to $48.1 million or 26 cents per diluted share compared to $37.7 million or 20 cents from the same quarter last year.

European Markets

In preliminary estimate, EU28 external current account recorded a surplus of €14.9 billion in April compared to a surplus of €11 billion in March and a surplus of €4.9 billion in a year ago month, the Statistical Office of the European Communities said.

In London trading, FTSE 100 index rose 8.22 to 6,716.69 and in Frankfurt the DAX index slid 11.94 to 11,088.36.

In Paris, CAC 40 index gained 0.8% or 36.70 to 4,840.18.

For the week, FTSE 100 index fell 1%, the DAX index slipped 1%, CAC 40 index decreased 1.5%.

Airbus Group SE jumped 2.2% to €58.98 after the France-based aerospace and defense group on a final business day of Paris Airshow secured an order for 110 jet planes at list prices worth $15.6 billion from Hungary-based discount airline Wizz Air.

The contract includes purchase rights for 90 new single-aisle jets, said airline chief executive Joszef Varadi said.

At this year’s Paris Air Show, the company booked an order for 421 planes at list prices of about $57 billion.

Colt Group SA surged 21.1% to 189.80 pence after the Luxembourg-based diversified company received an offer from a key shareholder Fidelity to acquire the company at a price of 190 pence per share or about £1.72 billion or $2.73 billion.

Asian Markets

Nikkei average soared 0.9% and jumped 1.1% in the week after Bank of Japan left its bond purchase program intact and reiterated its inflation target timetable.

Seven & I jumped on profit outlook. Mitsubishi UFJ Trust and Banking agreed to acquire fund administration business from UBS in Japan.

Nikkei average in Tokyo gained after the Bank of Japan left its bond purchase program intact and offered an upbeat assessment of the economy and inflation.

By 8-1 vote, policy makers decided to keep intact the plan to increase monetary base by 80 trillion yen a year or $650 billion.

Bank of Japan Governor Haruhiko Kuroda reiterated the central bank’s estimate of inflation to pick up to 2% rate between April and September 2016.

The Nikkei 225 Stock Average jumped 183.42 or 0.9% to 20,174.24 and the broader Topix index increased 14.35 to 1,631.01.

For the week, Nikkei 225 dropped 1.1%.

The yen closed at 122.98 against a dollar.

Mitsubishi UFJ Financial Group Inc gained 0.6% to 860 yen after the Nikkei business daily said Mitsubishi UFJ Trust and Banking division agreed to acquire the fund administration business from Switzerland-based UBS AG for about 30 billion yen.

Stocks in Mumbai advanced and the Sensex index gained the most in five weeks.

Rupee strengthens 18 paisa to 63.55 against one U.S. dollar.

The Sensex Index advanced 200.34 or 0.7% to close at 27,316.17. The CNX Nifty increased 50.35 or 0.6% to 8,224.95.

For the week, Sensex Index soared 3.5% and CNX Nifty climbed 3.1%.

Adani Power said IDBI Trusteeship Services Limited acquired 6.44% shares in the company. LIC increased its stake in Hindalco to 13%.

L&T secured an orders worth ₹2,278 crore from various business in May and June.