Stocks tread water on Greek uncertainty

Stock markets around the world clung to modest gains on Thursday, with European equities retreating from seven-year highs, after Germany rejected a Greek proposal to extend its bailout and oil prices dropped.

Government borrowing costs fell across the euro zone and the euro was little changed, paring its initial losses against the yen and dollar.

Despite the German rejection, Greece’s wording of a document seen by Reuters appeared to co-operate substantially with the terms laid out by euro zone finance ministers in earlier negotiations.

"At this point, investors think that even if a deal is reached, it won't mean the 'Greek issue' will be resolved," said Mirabaud Securities trader John Plassard. "There will be serious doubts on whether Greece will fully implement the agreement."

DUBLIN

The Iseq index of shares edged up 0.5 per cent to 5,798 which was roughly in line with its European counterparts.

Ryanair put in another strong performance, on back of steady volumes, closing the day 29 cent or 3.3 per cent up at €9.96 following a sector-wide trend. Rival Aer Lingus had a quiet day rising 3 cent or 1.5 per cent to €2.25, still below the €2.55 mark that British Airways parent IAG is prepared to offer.

Dublin-based explorer Petroceltic rose 3.9 per cent to €1.82 amid an increasingly fraught war of words with its main shareholder Worldview, which is trying to oust chief executive Brian O'Cathain.

Dragon Oil, which aborted a £500 million bid for Petroceltic in Decembersaw its share drop 1.5 per cent to €7.64 on the back of another slip in global oil prices.

Food group Aryzta has been one of the stellar performers of the Irish Stock Exchange this year and yesterday its share prices jumped by a further €1.38 to €67.50.

LONDON

Britain's top equity index retreated on Thursday from 15-year highs, with a drop in the share price of utility Centrica weighing on the market.

The blue-chip FTSE 100 index, which had risen to a 15-year high of 6,921.32 points on Wednesday, fell 0.4 per cent to 6,867.40 points in trading early in the session.

Centrica was the worst-performing FTSE 100 stock in percentage terms, dropping by 7.6 per cent. Weak energy prices hit Centrica's annual profits and the company also disappointed investors by cutting its dividend hard.

Oil prices tumbled on Thursday as US inventories were expected to hit record highs, which in turn put further pressure on energy stocks such as Tullow Oil and BP.

EUROPE

Europe’s stock rally lost steam on Thursday, with a benchmark index retreating from a seven-year high, after Germany rejected a new proposal from Athens for an extension of its bailout programme.

European stocks had rallied earlier in the session, with the FTSEurofirst 300 index climbing to as high as 1,522.25 points, a level not seen since late 2007, after Greece made its proposal for a six-month extension of the bailout. But the benchmark index trimmed gains and ended 0.3 per cent higher at 1,520.22 points. This year, the FTSEurofirst 300 has surged 11 per cent.

The Athens Stock Exchange FTSE Banks Index closed up 5.4 per cent, after rising by as much as 15 per cent during the session.

Around Europe, Germany's Dax index added 0.4 per cent, and France's Cac 40 gained 0.7 per cent.

US

US stocks fell modestly on Thursday with energy shares leading the drop amid a slump in oil prices, and investors remained cautious as uncertainty continued over the prospects of a debt deal with Greece.

Losses were outsized in the Dow after Wal-Mart Stores cut its sales outlook, citing the impact of a stronger dollar. Shares fell 3.21 per cent to $83.52. – (Additional reporting by Reuters)