ROME: European stocks ended lower Monday, weighed down by concerns about the state of Greece’s finances and political instability in Spain.
Over the weekend Greece raised doubts that it would have the money it is due to repay to the International Monetary Fund next month. This news comes despite months of negotiations between Greece’s leftist-led government and creditors, the European Union and the IMF.
A Greek government spokesman stated Monday that the country has the responsibility to repay its obligations both internally and to its international creditors, saying that the government aims to have a deal by the beginning of June.
Greece is scheduled to repay €1.6 billion ($1.76 billion) to the IMF between June 5 and June 19.
The benchmark Stoxx Europe 600 index closed 0.3% lower, with France’s CAC-40 down 0.5% and Italy’s FTSE MIB 2.1% weaker. The Greek benchmark index, the ATHEX Composite closed down 3.1%.
Spain’s IBEX-35 also dropped, ending down 2%, after regional and municipal elections showed voters punishing the governing Popular Party by giving weighty support to two upstart parties.
“Spain’s political landscape is now more fragmented, with antiestablishment Ciudadanos and Podemos gaining ground all across the country,” according to a note by UniCredit.
The Spanish banking sector has taken the brunt of the losses, with Banco Popular, the country’s sixth-largest bank by market value, closing down 3.4%, having been the biggest loser on the Madrid exchange.
That said, volumes have been limited Monday, with the major markets of the U.K., Germany and the U.S. on vacation.
In the foreign-exchange markets, the dollar continued to strengthen against the euro, following gains Friday after data showed that U.S. consumer prices rose for the third straight month in April.
The euro was 0.4% lower against the greenback at $1.0975, trading below the $1.10 level for the first time this month.
Brent crude turned around early losses, to trade around 1.2% higher on the day at $66.15 a barrel at the European close, while gold was marginally higher at $1,206 a troy ounce.
