By Sara Sjolin, MarketWatch
LONDON (MarketWatch)—European stock markets ended a volatile session on a downbeat note, as jitters over Greece’s next bailout tranche spooked investors ahead of a Eurogroup meeting.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.65% lost 0.3% to close at 269.53, marking the fourth straight day of declines.
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“We’re technically in a sweet spot for the market right now and typically markets want to go higher from November to January. But there are a couple of things that are holding us back,” said Philippe Gijsels, head of research at BNP Paribas Fortis Capital Markets.
He pointed to uncertainty over Greece’s next bailout installation, jitters over Spain not having formally requested a bailout, and nervousness associated with the so-called fiscal cliff in the U.S.
“The fact that there are no solutions yet means markets start to get hesitant. We’re basically flat compared to the end of the summer and markets are in wait-and-see mode,” he said. “I think it will be quite a relief if we get those three things out of the way.”
If they can be resolved, Gijsels said, “markets could rally 10% going into the end of the year.”
Shares of Telecom Italia SpA /zigman2/quotes/203233528/delayed IT:TIT -0.37% jumped 4.2%, on the rise after it said that Egyptian businessman Naguib Sawiris had expressed interest in acquiring a stake in the carrier
Peugeot SA shares /zigman2/quotes/203546414/delayed FR:UG -4.21% put on 3.6%. Fitch Ratings said a French state guarantee of as much as €7 billion on the car maker’s upcoming bond issuance will benefit the car maker, allowing it to offer cheaper loans to customers.
The guarantee, however, could also limit the firm’s strategic independence, Fitch said.
Heading in the other direction, shares of Davide Campari-Milano SpA /zigman2/quotes/203520627/delayed IT:CPR -0.23% lost 5.9%, as the spirits and beverages company said trading in Italy likely will remain volatile in fourth quarter. Read: Campari 9-month EBIT up 2.6%
Greece grabs attention
For the broader market, Greece grabbed attention as investors looked for developments in the country’s efforts to secure its next tranche of bailout money.
Early Monday, parliament passed its 2013 budget, as expected, a move seen as necessary for Greece to qualify for the next and much needed installation of financial aid. The budget’s approval comes ahead of a meeting of euro-zone finance ministers later Monday, with Greece likely to top the agenda. See: Greece passes 2013 budget, as required for aid
Analysts at Société Générale said in a note, however, that it “seems unlikely that any agreement [to disburse the aid] will be finalized at that time.”
“The hurdle lies in the fact that however we twist and turn the equations, Greece needs more money, both in terms of funding flows and debt levels,” they said.