A softer session for European equities as improved appetite for risk assets during Asian trading failed to carry over. Major benchmark indices across the region traded under pressure from the opening bell as a brief foray higher during the first hour of trading quickly reversed direction and subsequently spent the remainder of the day largely trading in negative territory.
Investor sentiment was dampened by the overhanging concerns regarding Greece’s debt crisis as officials on both sides struggle to make meaningful progress. The liquidity crunch as well as the threat of default weighed heavily on Greek shares with the Athens Stock Exchange General Index trading as much as 3% lower earlier on today before recovering in the afternoon. The swift recovery of earlier losses came after ECB board member Benoit Coeure stated that the central bank would continue to fund Greek banks as long as they were solvent, dismissing recent market rumours of a potential Greek exit from the euro. Despite today’s surprisingly upbeat performance in the index with month-to-date losses of just under 8% and year-to-date losses of 14.7% the Greek market has been hit particularly hard by the lack of progress regarding any restructuring of its debt obligations.
Three month LME copper prices extended declines ealier today as resistance at the 100 day MA continues to limit any significant upside potential. With prices declining throughout 2013, 2014 and the first quarter of 2015 the industry has seen a significant curtailment of investment in new copper projects with many miners opting to place projects on hold, following the lead of global bulk commodity miners who opted to focus on cost cutting in an attempt to improve margins. Copper prices hit a fresh five and a half year low in January and since then have struggled to breakout significantly above $6,000/tonne and with prices holding persistently around these lower levels it could be argued that the sell-off has been overdone.