ROME: European stocks finished lower Wednesday, hitting intraday lows after Greece’s latest economic reform proposal was rejected by creditors.
The Stoxx Europe 600 SXXP, -0.38% ended down by 0.4% at 397.32 after earlier struggling for direction. Only the energy sector SXEP, +0.84% managed to finish the session in positive territory.
Stocks began driving lower mid-morning following media reports that Greek Prime Minister Alexis Tsipras told his government the country’s creditors rejected Athens’s latest reform proposal.
Greece’s Athex Composite GD, -1.77% dropped by as much 4.6% before paring the loss, ending down 1.8% at 780.90. The index so far this week has surged nearly 14%, fueled by expectations that a deal would soon be struck to avert a debt default and possible exit from the eurozone for Greece.
Greek bond prices reversed course and fell, pushing the yield on 2-year debt up 82 basis points to 21.27%. The yield on 10-year bonds leapt 26 basis points to 10.68%.
Meanwhile, the euro EURUSD, +0.0982% lost grip of $1.12 after the media reports, trading at $1.1178. That was still slightly higher than $1.1168 late Tuesday
Greece needs a deal to unlock new financing ahead of a €1.54 billion ($1.75 billion) debt payment due to the IMF at the end of June.
