The French market is in negative territory in afternoon trading Tuesday, as focus has shifted again to the debt crisis in Europe with worries over Spain once again gathering attention, overshadowing the government formation efforts in Greece.
Spain raised the maximum target amount at a debt auction but at a higher cost than a month ago as the country's 10-year benchmark yield remained above 7 percent, a euro-era record widely seen as unsustainable, amid concerns that the country may be forced to seek a bailout.
The International Monetary Fund on Monday urged Europe to focus on reviving economic growth to help the recovery of the region's crisis-hit economies. A paper published by IMF staff observed that Europe needs to revive economic growth to help break the vicious cycle of the feedback loop, between weak government finances, weak banks and weak growth that continually undermine each other.
Elsewhere, the Group of Twenty nations, during Monday's meeting at Los Cabos in Mexico, called for more efforts by Europe to contain the debt crisis. Meanwhile, the BRICS nations vowed to step up their contribution to the International Monetary Fund to support Europe fight the turmoil.
Eurozone members should "take all necessary policy measures" to safeguard the stability of the single currency bloc, reports said citing the G20 draft communique, to be released at the end of the G20 meeting on Tuesday.
Capital Economics European Economist Ben May said in a note on Monday that though the victory of the pro-bailout New Democracy in Sunday's elections eases concerns of Greece's imminent exit from the euro-zone, the country still faces the risk of leaving the single-currency bloc at the end of this year.
The Euro Stoxx 50 index of eurozone bluechip stocks is gaining 0.20, while the Stoxx Europe 50 index, which includes some major U.K. companies, is adding 0.46 percent.
The CAC 40 index is losing 0.1 percent, reversing early gains.
Danone is plunging 7.1 percent. The dairy giant slashed its operating margin target for 2012, citing steeper-than-anticipated demand deterioration in Southern Europe, particularly in Spain, and escalating costs.
Loreal is declining 2 percent and Pernod-Ricard is losing 1.8 percent.
Societe Generale is losing 1.1 percent after Morgan Stanley cut the stock to "Equalweight." BNP Paribas and Credit Agricole are in negative territory.
Peugeot is losing 0.3 percent while Renault is advancing 2.1 percent.
Unibail-Rodamco and Technip are gaining 1.6 percent each. Alcatel Lucent is advancing 1.5 percent.
Elsewhere in Europe, the German DAX is adding 0.38 percent. The UK's FTSE 100 is advancing 0.82 percent and Switzerland's SMI is gaining 0.59 percent.
In economic news, German economic expectations declined more than expected in June, survey results published by the Center For European Economic Research showed. The ZEW Indicator of Economic Sentiment for Germany decreased by 27.7 points to a level of minus 16.9 points in June. This is the indicator's strongest decline since October 1998. Economists had forecast a decline to 2.3.
U.K. annual inflation slowed unexpectedly in May to the lowest since November 2009, the Office for National Office said. Annual inflation eased to 2.8 percent, largely due to the slower increases in food and non-alcoholic beverage prices. Economists were expecting the rate to remain unchanged at 3 percent in May.
Across Asia/Pacific, markets had a mixed outing. Australia's All Ordinaries slid 0.4 percent and China's Shanghai Composite Index dropped 0.7 percent, while Hong Kong's Hang Seng edged down 0.1 percent. Japan's Nikkei 225 declined 0.8 percent.
In the U.S., futures point to a higher open on Wall Street, ahead of a 2-day FOMC meeting that gets underway today. In the previous session, the major averages ended the day on opposite sides of the unchanged line, as traders shrugged off the results of the Greek elections ahead of the Federal Reserve's monetary policy meeting. While the Dow edged down 0.2 percent, the Nasdaq rose 0.8 percent and the S&P 500 gained 0.1 percent.
In the commodity space, crude for July delivery is sliding $0.13 to $83.14 per barrel and August gold is adding $3.9 to $1630.9 a troy ounce.
by RTT Staff Writer
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