MARKETS-STOCKS/EUROPE Germany's DAX down in early trading as Chinese woes plague markets

Record ID: 143029

  • Title: MARKETS-STOCKS/EUROPE Germany's DAX down in early trading as Chinese woes plague markets
  • Date: 19th August 2015
  • Summary: FRANKFURT, GERMANY (AUGUST 19, 2015) (REUTERS) EXTERIOR OF FRANKFURT STOCK EXCHANGE EU FLAG VARIOUS OF TRADING FLOOR VARIOUS OF TRADERS TRADING FLOOR BOARD SHOWING FINAL VALUE OF DAX FROM PREVIOUS DAY AND STARTING VALUE OF CURRENT DAY VARIOUS OF BOARD SHOWING DAX GRAPH VARIOUS OF TRADERS BOARD SHOWING BANKING STOCKS (SOUNDBITE) (German) HEAD TRADER AT HAUCK & AUFHAEUSER, F
  • Embargoed: 3rd September 2015 13:00
  • Keywords:
  • Location: Germany
  • Country: Germany
  • Topics: General
  • Reuters ID: LVAAIVZKOEAB4OKPCO2BGX6LBTDF
  • Aspect Ratio: 16:9
  • Story Text: European stock markets fell on Wednesday (August 19), extending a recent losing streak on the back of persistent worries over China.
    Germany's DAX index was down 1.51 percent at 10,750 points at 0852GMT.
    "The DAX opened substantially weaker today. The reason for this is the Chinese markets in Shanghai, which was once again under pressure and that shows that things do not look as good with the Chinese economy as one would like to believe. That has led to lower standing in our markets too," Fidel Helmer from private bank Hauck & Aufhaeuser told Reuters in Frankfurt.
    Chinese stock markets took a wild ride on Wednesday, tumbling and soaring in a session that made little sense other than to highlight that investors have almost no faith in a month-long government effort to stabilise them.
    The Shanghai and Shenzhen markets fell 3 percent in morning trade, taking their losses to more than 8 percent since investors stampeded without warning on Tuesday.
    But state-backed buyers later rushed in, enabling stocks to finish the day more than 1 percent higher.
    Investors say China's stock markets - which were never for the faint of heart - have become dysfunctional since the government's massive and unprecedented rescue effort.
    Helmer said that investors in Germany were however not worried about an upcoming vote in the country's parliament over a third bailout for Greece.
    "Of course, there is no doubt that the vast majority will vote in favour of the bailout, despite the dissenters and that is why it does not influence the markets today," he said.
    The trader went on to praise a move by Greece to award concessions to run more than a dozen regional airports to Germany's Fraport in a deal worth 1.2 billion euros.
    A preliminary deal was struck in 2014 but was thrown into doubt after Prime Minister Alexis Tsipras's leftist government took power in January and said it would review the agreement.
    On Tuesday (August 18), a Greek government official said a decision published in the government gazette confirmed its commitment to proceed with the deal on the previously-agreed terms, part of the latest bailout with Greece's lenders.
    "The deal which Fraport has made with Greece, a concession for more than 40 years to operate 14 airports is surely a positive story, for Fraport and also for Greece but there were will certainly also be voices which will find fault with it," said Helmer.
    An official said the previously-frozen deal would be finalised in the coming weeks.
    Once ratified, the deal would be the first privatisation sale completed by Tsipras's government, which has long opposed the sale of strategic state assets but agreed to implement privatisations in exchange for bailout funds.
    A spokesman for Fraport said the government's decision was "the basis for further negotiations" but no contracts had been signed.
    Fraport and Greek energy firm Copelouzos had agreed with the Greek privatisation agency in 2014 that it would run 14 airports in tourist destinations including Corfu, striking one of Greece's biggest privatisation deals since the start of the debt crisis.
    Under the terms of the deal, the German-Greek group was expected to spend about 330 million euros in the first four years to upgrade the airports, which would be leased for 40 years.
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