On Thursday afternoon, European stock markets trimmed gains in the afternoon trading session.
This came in response to news that negotiations between Greece and the IMF (International Monetary Fund) had been stopped as a result of a lack of progress in reaching a bailout agreement.
The Stoxx Europe 600 index (SXXP, +0.57%) reached an intraday high of 395.55 and by the close of trading, the index declined slightly to end at 393, up 0.6 percent.
On Wednesday, this pan European benchmark broke a 6-day losing streak as a result of a report from Bloomberg that Germany is now ready to offer cash-strapped Greece an attractive aid deal. To receive this aid, Germany has requested Greece to implement one reform immediately.
As a result of this news, markets were boosted on Thursday but were stopped in their tracks after the IMF’s technical team left Brussels to return to Washington after failed negotiations.
According to Gerry Rice, a spokesman for the IMF, in the key areas that need to be discussed and resolved, there are major differences between Greece and the IMF and also, there has been no success in reducing these differences.
At the time of this news, the Athex Composite Index (GD, +8.16%) in Greece was closed, ending at 823.16, up 8.2%.
Greece currently owes a 1.6 billion euro payment ($1.8 billion) to the IMF which is payable by the end of June. The bottom line is if Greece does not get more financial aid soon, they run the risk of running out of cash. Jens Weidmann, the European Central Bank Governing Council member, stated on Thursday that chances of Greece becoming insolvent are ‘increasing by the day’.
Meanwhile, other markets in Europe traded higher with U.K.’s FTSE 100 index (UKX, +0.24%) up 0.2% to 6,846.74 while France’s CAC 40 index (PX1, +0.74%) gained 0.7% to 4,971.37.