Decline in European markets continues

Stock markets across Europe remained in decline on Tuesday June 9th, following on from slumps in equities in Asia as the prospect of a rise in US interest rates spooks global investors. Meanwhile, the Greek debt crisis continues to heighten uncertainties in the single currency region.

Germany’s DAX was nearly 1.6 per cent in negative territory, the French CAC 40 was around 1.2 per cent lower and the Euro Stoxx 50 declined over 1.2 per cent. The UK’s leading share index, the FTSE-100, was more than 0.6 per cent down by midday.

Concern that the US Federal Reserve might raise interest rates for the first time since 2006 weighed on global stock markets, especially since last Friday’s upbeat labour market report moved forward the expectation of a rate hike as early as September this year. 

The Euro Stoxx 50 declined to its lowest level since mid-February in its fourth-consecutive day of losses. 

News that confirmed the Eurozone economy grew by 0.4 per cent in the first quarter of 2015 failed to quench the overall negative sentiment. Further downward pressure was added since the report also confirmed that the Greek economy contracted by 0.2 per cent in the same period, which experts are claiming as a recession.

The ongoing Greek debt saga is romping through headlines once again today, as reports flooded in that Greece had submitted a new reform package in an attempt to break the negotiations deadlock. However, Bloomberg reported that one EU official has already claimed it doesn’t go far enough.

According to Bloomberg, one of the officials branded the revised Greek plan as a “vague rehash of earlier proposals” that still fails to be credible. 

Despite this, Margaritis Schinas, the European Commission spokesman, said that the proposals are now being circulated throughout the institutions to be assessed “with diligence and care”. The overall uncertainty remains a drag on European stocks.