World stocks drift lower ahead of Greek vote; China plunges
HONG KONG (AP) — World stock markets mostly drifted lower Friday ahead of Greece’s weekend austerity referendum, while China’s main stock benchmark plunged as much as 7 percent as government market stabilization measures failed to reassure panicky investors.
KEEPING SCORE: European stocks were mixed in early trading, with France’s CAC 40 slipping 0.1 percent to 4,828.72 while Germany’s DAX was flat at 11,096.84. Britain’s FTSE 100 edged 0.1 percent lower to 6,622.15. U.S. markets were closed for the Independence Day holiday weekend.
GREECE VOTES: Investors are awaiting the outcome of a weekend referendum on whether to accept tough conditions in exchange for a bailout deal for the Mediterranean country’s troubled economy. The government says a “No” vote will put it in a better bargaining position for new terms, while European officials and the opposition say a rejection could lead to Greece’s exit from the euro and Europe. Markets in Asia will get the first chance to react to the result of Sunday’s vote.
CHINA SELLOFF: A Chinese market rout deepened as investors dumped shares in spite of government measures this week aimed at restoring confidence, such as cutting fees and easing rules on borrowing money for trading. The China Securities Regulatory Commission, the market watchdog, said late Thursday that it’s launching an investigation into suspected stock market manipulation, state media reported, in an indication of Beijing’s increasingly frantic efforts to halt the market slide.
ANALYST VIEWPOINT: “Policies take time to work their way through the system before sentiments can be more permanently altered,” Bernard Aw of IG Markets in Singapore wrote in a commentary. “For now, the mood is verging on panic. It is extremely hard to calm a bear who is in a rage — not impossible, but tough.”
KEEPING SCORE: The Shanghai Composite Index in mainland China tumbled as much as 7 percent in morning trading but losses moderated and it ended the day down 5.8 percent at 3,686.92. The index has lost nearly 19 percent this week and 25 percent in the past month. Hong Kong’s Hang Seng fell 0.8 percent to close at 26,064.11, while Japan’s Nikkei 225 edged up 0.1 percent to 20,539.79. South Korea’s Kospi slipped 0.1 percent to 2,104.41 and Australia’s S&P/ASX 200 retreated 1.1 percent to 5,538.30.
ENERGY: Benchmark U.S. crude fell 39 cents to $56.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 3 cents to close at $56.93 a barrel on Thursday. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 39 cents to $61.68 a barrel in London.
CURRENCIES: The dollar fell to 123.02 yen from 123.09 in late trading Thursday. The euro rose to $1.1111 from $1.1087.