- Title: MARKETS-STOCKS/EUROPE European shares set for biggest weekly fall in 6 weeks
- Date: 14th August 2015
- Summary: FRANKFURT, GERMANY (AUGUST 14, 2015) (REUTERS) FRANKFURT STOCK EXCHANGE BOARD SHOWING DAX INDEX CLOSING AT 11014.63 POINTS ON AUGUST 13 TRADER DAX BOARD SHOWING PRICES AND MARKET SHARES VARIOUS OF TRADERS DAX BOARD SHOWING AN INCREASE OF 0.09 PER CENT DAX BOARD TRADER GRAPH ON BOARD SHOWING DAX INDEX INCREASE (SOUNDBITE) (German) HEAD TRADER AT HAUCK & AUFHAEUSER, FIDEL HE
- Embargoed: 29th August 2015 13:00
- Keywords:
- Location: Germany
- Country: Germany
- Topics: General
- Reuters ID: LVA8EGALE78E11AEQH7X7CIKE4KX
- Aspect Ratio: 16:9
- Story Text: European stocks edged higher on Friday (August 14), buoyed by auto and travel stocks, although they remained on course for a weekly decline after China moved to weaken its currency.
After devaluing the yuan early in the week, China's central bank said on Thursday the country's strong economy meant there was no reason for the currency to fall further, helping to calm jittery global markets.
Those reassurances helped the pan-European FTSEurofirst 300 close 0.9 percent higher on Thursday. However, it remains down 2.5 percent for the week, its biggest weekly decline in nearly a month, after China's devaluation hit mining, auto and luxury stocks.
In Frankfurt, head trader at Hauck & Aufhaeuser, Fidel Helmer, said despite a global export market, sales figures had been hit and traders would keep a close eye on further developments in China.
"You could see yesterday that the BMW sales figures improved despite weakened figures from China. That is a typical example to show that China is a very important trading partner for us, but we have worldwide exports and not only in China. We have to be really careful with what happens further in China, though," he told Reuters at the Frankfurt stock exchange.
"The yuan was linked to the U.S. dollar and so it affects America the most. It means China can export worldwide at a cheaper rate. Chinese products are then cheaper and, on the flip side, goods from Europe and America will be more expensive in China. And that is certainly a small handicap, but it is not earth-shattering," he added.
Greece also remained a key issue as the southern European country and its European lenders work on reaching a deal to keep the country financially afloat and meet an important debt repayment to the European Central Bank on August 20.
The Greek parliament voted on Friday morning to approve the country's third financial rescue by foreign creditors in five years and euro zone finance ministers are expected to approve the vital aid for Athens later on Friday.
Helmer said he hoped politicians in Brussels could reach the long sought agreement, but warned the position of the International Monetary Fund (IMF), in favour debt cuts for Greece, could clash with that of Germany, whose Finance Minister Wolfgang Shaeuble has repeatedly said that he considers a writing off of the Greek debt illegal.
"What is really critical right now are the statements from the IMF, that they will only agree on the aid package for Greece if there is a cut in debt. And our German finance minister is very against that, so we will have to see what kind of compromise there will be. I am confident that the politicians will always find a compromise, but it remains exciting, Greece is still a big theme here," Helmer said.
Despite the Greek government passing the bailout bill, European stocks were still poised for a weekly loss of almost 3 percent, their biggest loss in four weeks. A close of 3.5 percent on the week would be the biggest decline this year. - Copyright Holder: REUTERS
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