European Stocks End Lower Ahead of Greek Referendum


European Stocks End Lower Ahead of Greek Referendum

European stocks ended lower, closing their worst week so, as most investors remained cautious ahead of a Greek referendum on European Union prescribed reforms that would determine the country’s future in The European Union.

The European benchmark Stoxx 600 Index ended 0.5% lower at 383.52 points with all its major sectors in the red.

The benchmark index slipped 3.4% for the week, the biggest weekly decline since mid December.

Europeans bonds also traded cautiously on the day with yield on top rated German 10 year bonds, Europe’s benchmark for borrowing costs, also falling on the day with most traders choosing to invest in relatively stable low yielding assets like gold.

“Attention will be pinned on Greece and this is likely to see investors cautious as we head into the weekend … Even if we get a Yes’ vote, this means the country must go back to the negotiation table and try to knock something together again,” IG market analyst Stan Shamu told Reuters.

“However, it’s a lot worse on the other side as a ‘No’ vote will present a host of uncertainties that could really rattle markets … Either way, traders will need to buckle up for a tumultuous Monday.”

Trading was choppy in most of the continents major indexes was choppy with most investors not wanting to position themselves too heavily on either side of the referendum result.

Most polls show that the Greek referendum is too close to call with the Greek Prime Minister Alex Tsipras urging citizens to vote “no” saying that will hasten a possible deal with the rest of the Euro zone.

“Investors clearly want to sell what they can before the weekend,” Ramiro Loureiro, a Lisbon-based market analyst at Banco Comercial Portugues SA’s Millennium unit, told Bloomberg.

“The small difference between the ‘yes’ and the ‘no’ vote has generated so much uncertainty that, when you throw in thin trading volumes, you’re bound to get more marked losses near the close of trading. Tsipras has been very aggressive with his campaign.”

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