European Stocks Edge Lower

By Josie Cox and Tommy Stubbington 

        European stocks edged lower Tuesday as investors remained nervous ahead of an impromptu summit of eurozone leaders, where Greece will once again face its European creditors.
        The Stoxx Europe 600 was 0.1% lower late morning as Monday's declines slowed. Germany's DAX dropped 0.4%, France's CAC fell 0.6%, Italy's FTSE MIB rose 0.2% and Spain's IBEX fell 0.2%.
        Bond markets continued to show signs of stress. German debt, seen as a haven by investors, climbed. The yield on Germany's 10-year benchmark bond fell 0.09 of a percentage point to 0.68%, the lowest in more than a month. Yields fall as bond prices rise.
        Italian and Spanish bonds reversed part of the previous day's losses. The yield on Italian 10-year debt was at 2.29%, 0.07 percentage point lower on the day. The yield on 10-year Spanish debt was at 2.30%, 0.04 percentage point lower.
        "The next few days will provide a clearer picture as to how this Greek drama will unfold, but we reiterate the fact that volatility will remain extremely high and news dependent," said Giordano Lombardo, chief executive and group chief investment officer of Pioneer Investments.
        "We suggest maintaining a cautious posture across all asset classes," he said.
        On Monday, the European Central Bank raised the pressure on Greek banks by forcing them to post more collateral for emergency central bank loans they depend on for survival, while also maintaining a ceiling on the amount of the loans that have been in place for more than a week.
        "This effectively makes it harder for Greece's banks to access emergency loans," Credit Suisse economists wrote in a note.
        That decision came after Greeks on Sunday voted to reject their international creditors' conditions for further bailout aid.
        Without a fresh inflow of funds, Athens will have trouble paying its bills and may default on a critical EUR3.5 billion ($3.9 billion) payment owed to the ECB on July 20 to redeem Greek government bonds held by the central bank.
        The head of Greece's banking association said banks would remain closed through Wednesday; few expect them to open soon after that.
        They were closed all of last week, as was the country's main stock exchange. The Athens bourse will remain closed Tuesday and Wednesday as well.
        The euro was 0.8% lower against the dollar at $1.0973.
        In commodity markets Brent crude was 1.4% higher at $57.34 per barrel. On Monday, oil prices recorded their biggest single-day declines in more than three months, as gyrations in Chinese stocks and the prospect of more crude from the U.S. and Iran revived worries about the global supply glut.
        Gold was 0.6% lower on the day at $1,165.90 per troy ounce.
        Write to Josie Cox at josie.cox@wsj.com and Tommy Stubbington at tommy.stubbington@wsj.com
        (END) Dow Jones Newswires

        July 07, 2015 07:13 ET (11:13 GMT)

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