The continued inability of Europe to agree on Greece's next batch of bailout cash weighed on markets Wednesday, a day when much of Wall Street will be packing up early for the Thanksgiving holiday.
The continued inability of Europe to agree on Greece’s next batch of bailout cash weighed on markets Wednesday, a day when much of Wall Street will be packing up early for the Thanksgiving holiday.
Greece’s partners in the group of 17 European Union countries that use the euro once again failed to agree a strategy that would have allowed them to release more money for the debt-crippled country. Though officials say a deal is close – the finance ministers reconvene on Monday – a few thorny issues still need to be ironed out.
The two main concerns appear to center on how to plug a Greek budget shortfall over the coming two years that has appeared because of the country’s deeper than anticipated recession and how to get Greece’s debt burden down to what the International Monetary Fund considers a sustainable rate. The IMF wants Greece’s debt burden down to 120 percent of its economy by 2020 and has suggested that countries take a hit on their loans, a seemingly anathema position to mighty Germany.
Greece is waiting for an overdue (EURO)31.5 billion ($40 billion) loan payment that is needed so Athens can pay its bills and avoid running out of cash.
- Could Chris Polk be a fit for the Seahawks?
- Anonymous donor pays off landslide victim's $360K mortgage
- Jesse Jones is back: Seattle's superhero consumer reporter is now at KIRO 7
- This USB cable finally could be connector for long haul
- Fire destroys Bellevue auto showroom, dozens of cars
Most Read Stories
In Europe, the FTSE 100 index of leading British shares was down 0.2 percent at 5,737 while Germany’s DAX fell 0.1 percent to 7,166. The CAC-40 in France was 0.2 percent lower at 3,456.
“Maybe it isn’t a major surprise that no agreement was reached amongst Greece’s creditors yesterday considering that the IMF and the EU seemed to have completely different strategies with regard as to how and when to restore Greeks debt to a sustainable path coming into the meeting,” said Gary Jenkins, managing director of Swordfish Research.
“It’s not good news but the market has been waiting for a while now for these issues to be resolved so I guess we can all wait until next Monday,” he added.
Greek shares underperformed their peers in Europe amid dismay over the talks’ failure. The main Athens index was down 0.8 percent with bank stocks feeling the brunt of the selling.
The euro recovered its poise after an initial sell-off when news emerged of the latest failure. It was trading 0.2 percent lower on the day at $1.2784.
Wall Street was poised for a modest retreat at the open too though trading will likely be heavily impacted by the onset of the Thanksgiving rush. Dow futures and the broader S&P 500 futures were down 0.2 percent.
Earlier in Asia, Japan’s Nikkei 225 index rose 0.9 percent to close at 9,222.52, with export shares enjoying the benefits of a weakened yen. The dollar was up a further 0.4 percent at 82.17 yen.
Hong Kong’s Hang Seng jumped 1.4 percent to 21,524.36. Mainland China’s Shanghai Composite Index gained 1.1 percent to 2,030.32 while the smaller Shenzhen Composite Index advanced 1.1 percent to 808.
In the oil markets, the focus was on diplomatic efforts to broker a cease-fire in Gaza intensified. Oil prices regained some of the ground lost the day before, with the benchmark rate up 53 cents at $87.28 a barrel.