ROME: European stocks tumbled after their greatest weekly rally in three years as Greek opposition party Syriza won Sunday’s election.
The Stoxx Europe 600 Index slipped 0.3 percent to 369.12 at 8:25 a.m. in London, halting a seven-day winning streak, as Greek Prime Minister-elect Alexis Tsipras prepares to form a coalition dedicated to ending austerity. On Friday, optimism over European Central Bank stimulus dominated, with the Stoxx 600 completing a 5.1 percent jump for the week, the most in three years.
The ECB announcement has also propelled Greek shares. The ASE Index (ASE) erased its losses for the year, ending the week with a 6.1 percent rally, the biggest since Oct. 17. Now Tsipras’s mandate is to confront the nation’s program of austerity imposed in return for pledges of 240 billion euros ($269 billion) in aid since May 2010 and to deliver his election pledges including a writedown of Greek debt while persuading European creditors to keep aid flowing.
“Significant concessions will have to be made on both sides to get an acceptable deal,” said Manish Singh, who helps oversee $2 billion as head of investments at Crossbridge Capital in London. “A majority Syriza government also increases the risk of a Grexit as an accidental outcome.”
Commodity producers fell 2.1 percent and energy stocks lost 1.3 percent for the biggest declines among 19 industry groups in the Stoxx 600. Glencore Plc slid 2.5 percent and Seadrill Ltd. dropped 5.9 percent.
Among companies moving on corporate news, Aer Lingus Group Plc added 3 percent. International Consolidated Airlines Group SA has made an improved offer to take over Irish carrier, and its board supports the new bid, according to a person familiar with the situation.
Pakistan to get $3b loan from Islamic Trade Financing Corporation
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