Last updated: September 9, 2011 2:33 pm

Greek stocks track bail-out worries

Greek stocks continued to fall on Friday, as concern about the outlook for the EU/IMF bail-out of the country’s finances resurfaced.

The review of Greece’s austerity reforms was unexpectedly put on hold after Athens said it would miss its budget deficit targets. There was some talk of a disagreement between the Greek authorities and the debt inspectors, but this was denied by the Greek government.

Greek shares declined sharply, with the Athens General index down 4 per cent to 891.93. The National Bank of Greece was a prominent faller, dropping 4.7 per cent to €3.02, Alpha Bank fell 5.5 per cent to €2.04, and Eurobank fell 5.9 per cent to €1.44. Piraeus Bank fell 4.8 per cent to €0.60.

The worries about Greece added to disappointment across global markets after US jobs data, which stoked concern about the state of the US economy, showed that the number of jobs outside the agricultural sector remained flat in August. The closely followed non-farm payroll report had been expected to show the creation of 60,000 jobs.

“Net employment flatlined in August,” Ellen Zentner at Nomura Securities said before the report. “When the outlook is uncertain, businesses don’t hire. Calls that we’re on the cusp of a recession or already there are not completely unwarranted.”

Swiss stocks fell, the nation’s watchmakers leading losses, with Swatch Group and Cie Financiere Richemont dropping 4.1 per cent to SFr351.6 and 4.3 per cent to SFr44.08, respectively. Straumann Holding , the dental-implant maker, sank 5.2 per cent to SFr145.10 after Goldman Sachs downgraded the stock, while Swiss lender UBS lost 4.3 per cent to SFr11.17.

The Swiss SMI index was down 2.7 per cent at 5,383.14.

German stocks retreated, paring the benchmark Dax’s biggest weekly gain in more than a month.

Deutsche Bank and Commerzbank led declines, falling 4.9 per cent to €26.30 and 5.2 per cent to 1.93, respectively. BMW , the world’s largest maker of luxury vehicles, sank 3 per cent to €55.20 after Bankhaus Metzler advised selling the shares.

Germany’s Xetra Dax fell 3.3 per cent to 5,541.76.

Swedish tool and steel manufacturer Sandvik rose, moving up 2.2 per cent to SKr87.60 as it planned to reshuffle its business areas.

Sandvik said in a statement on Friday the strategy included reorganising operations into five business areas instead of three.

“The new strategy is focused on increasing profitability, strengthening position in attractive markets and segments, and a more active portfolio management,” the company said.

Portuguese company EDP led European risers as GDF Suez said they were considering a bid for the Portuguese government’s stake in the company.

“We will see,” GDF Suez chief executive Gérard Mestrallet said. “For the moment we have made no decision.”

The FTSE Eurofirst 300 index fell 2.1 per cent to 952.7 and the CAC 40 index fell 2.5 per cent to 3183.25.

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