• European stock markets mid session: stocks traded slightly lower ahead of the Greek referendum on Sunday

Market news

3 July 2015

European stock markets mid session: stocks traded slightly lower ahead of the Greek referendum on Sunday

Stock indices traded slightly lower ahead of the Greek referendum on Sunday. Greek Finance Minister Yanis Varoufakis said on Friday that a deal between Greece and its creditors will be reached regardless of the outcome of Sunday's referendum. He noted that a deal was "more or less done".

The head of the Eurogroup Jeroen Dijsselbloem said on Thursday that if Greeks vote "No" on Sunday, it could mean that Greece have to leave the Eurozone. He added that Greeks should not expect better conditions if they vote "No".

Meanwhile, the economic data from the Eurozone was solid. Retail sales in the Eurozone rose 0.2% in May, exceeding expectations for a 0.1% gain, after a 0.7% increase in April.

The increase was driven by higher food, drinks and tobacco and non-food sales.

On a yearly basis, retail sales in the Eurozone rose 2.4% in May, beating forecasts of a 2.3% gain, after a 2.7% increase in April. April's figure was revised up from a 2.2% rise.

Eurozone's final services purchasing managers' index (PMI) increased to 54.4 in June from 53.8 in May, in line with the preliminary reading.

The increase was driven by rises in new business and employment.

Eurozone's final composite output index increased to 54.2 in June from 53.6 in May, up from the preliminary reading of 54.1. It was the highest level since May 2011.

"Despite the escalation of the Greek crisis in the second half of the month, the final PMI for June came in slightly above the 'flash' estimate, suggesting the turmoil has so far had little discernible impact on the real economy," Chief Economist at Markit Chris Williamson said.

Germany's final services purchasing managers' index (PMI) rose to 53.8 in June from 53.0 in May, missing the preliminary reading of 54.2.

The increase was driven by rises in new orders and employment.

"June's PMI results signalled a re-acceleration of service sector activity growth in Germany, after May data pointed to the weakest rise in output for five months. Encouragingly, a further increase in staff recruitment highlighted confidence about upcoming workloads despite new business rising at the slowest pace in 2015 so far," an economist at Markit, Oliver Kolodseike,said.

France's final services purchasing managers' index (PMI) climbed to 54.1 in June from 52.8 in May, in line with the preliminary reading. It was the highest reading since August 2011.

The increase was driven by a rise in new business.

"Activity growth picked up pace further in June, rounding off a solid quarter of expansion in French private sector output. The PMI figures suggest that second quarter GDP will show a further robust expansion following the 0.6% rise seen in Q1," Senior Economist at Markit Jack Kennedy said.

Markit's and the Chartered Institute of Purchasing & Supply's services purchasing managers' index (PMI) for the U.K. jumped to 58.5 in June from 56.5 in May, exceeding expectations for a rise to 57.4.

The increase was driven by robust expansion in new work inflows.

"While uncertainty caused by the Greek debt crisis rules out any imminent hike in interest rates, the post-election rebound in service sector business activity adds to the likelihood of the Bank of England starting to nudge rates higher later this year. The survey data are indicating an acceleration of economic growth to 0.5% in the second quarter, up from 0.4% in the first three months of the year," the Chief Economist at Markit Chris Williamson said.

Current figures:

Name Price Change Change %

FTSE 100 6,613.43 -17.04 -0.26 %

DAX 11,078.4 -20.95 -0.19 %

CAC 40 4,812.63 -22.93 -0.47 %

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