Shares in Europe fell on Tuesday despite the overnight agreement by European finance ministers on a second bailout for Greece. A messy default was avoided but the Greeks must make yet more spending cuts and accept the permanent presence of EU monitors in exchange. Private sector bond holders would be offered a ‘voluntary’ haircut of 53.5%, higher than the 50% previously agreed, but perhaps better than many commentators had speculated of late.
Meanwhile yields on benchmark Italian government bonds fell to a four month low of 5.4%, just three months after hitting a Euro era high of 7.5%.
In London the FTSE 100 closed 17 points lower at 5928, as it once again failed to make much headway above the 5900 level it broke through at the start of the month. Overseas, the German DAX and French CAC also drifted lower, but as Europe closed for the day US stocks were in marginally positive territory.
Vedanta Resources topped the FTSE leader board with a gain of 7%, rising 95p to 1453p as it announced a shakeup in its corporate structure and as Deutsche Bank increased its price target on the shares to 1720p.
Elsewhere Gold and Silver advanced 1% and 2% respectively whilst the pound was lower versus both the Euro and Dollar.