By Carla Mozee, MarketWatch
Pandora shares shine
LONDON (MarketWatch) -- European stocks recovered after an
earlier fall Tuesday, but gains were somewhat capped by uncertainty
about Greece's future in the eurozone after key debt talks fell
apart.
The Stoxx Europe 600 ended less than 1 point higher, rising
0.1%, at 377.02. The index opened lower following a collapse in
debt talks late Monday between Greece and eurozone finance
ministers, known as the Eurogroup. Greece's new antiausterity
government rejected an extension to its 240-billion-euro ($272
billion) bailout program under the conditions offered by its
European partners.
Greek bank stocks finished among the biggest decliners on the
Stoxx 600, with Piraeus Bank SA shares losing 9%, Alpha Bank SA
down 8.6% and Eurobank Ergasias SA off 8.1%. The moves pressured
Greece's Athex Composite , which fell 2.5% to 838.61. The Athex's
month-to-date gain has now been reduced to 16.2%.
Finance ministers from the European Union, known as Ecofin, met
Tuesday, and a new meeting of the Eurogroup may be scheduled for
Friday. Read: These 5 charts explain the latest Greek drama.
"Whether or not the Greek government will stick to its guns is
difficult to predict, but they seem increasingly cornered," said
Société Générale economist Yvan Mamalet in a note Tuesday.
European Central Bank officials are scheduled to hold a regular
meeting on Wednesday. The agenda is expected to include a
discussion about emergency liquidity assistance, which was recently
increased for Greek banks. Discussing the ELA funding "looks
certain to add pressure, by reiterating the current ELA program
will remain only as long as Greek banks are seen as solvent and
also as long as the Greek government is in talks with the euro
area," said Mamalet.
The euro (EURUSD) had fallen after the breakdown in talks, but
later revved higher against the U.S. dollar to buy $1.1393, versus
$1.1356 late Monday.
Investors appear "to be taking in stride the latest setback in
negotiations over Greece," said Marc Chandler, global head of
currency strategy at Brown Brothers Harriman, in a note Tuesday.
"Each side has their inviolable principles, and yet some compromise
has to be found. It might not be possible to do so on the finance
minister level, but may require another heads of state gathering to
break the logjam."
Chandler also noted that discussions about institutional
financial-stability frameworks are not just about Greece and its
creditors "but about other anti-austerity parties that may come to
power later this year in Spain and Portugal."
European benchmarks: Germany's DAX narrowed its loss to 0.3% at
10,895.62. The closely watched ZEW indicator of German economic
sentiment rose in February to 53.0, the highest reading since
February of last year. But the reading, released Tuesday, fell
short of the 55.5 consensus estimate.
The Center for European Economic Research, or ZEW, said the
ECB's quantitative easing and "unexpectedly high" economic growth
in the fourth quarter have aided sentiment. "On the other hand, the
intensification of the Ukraine crisis and the collision course of
the new Greek government are dampening expectations," said ZEW
President Professor Clemens Fuest in a statement.
France's CAC also came off deeper losses to end down less than 1
point at 4,751.91. The U.K.'s FTSE 100 turned higher by 0.6% to
6,898.13, as consumer-related shares pushed higher. On Tuesday, the
U.K.'s Office for National Statistics said consumer-price inflation
slowed to 0.3% in January, the lowest annual rate since March
1960.
Stoxx 600 Movers: TNT Express NV shares dropped to the bottom of
the index, losing 9.8%, after the Dutch parcel delivery company
swung to a fourth-quarter loss of 137 million euros ($156
million).
Banco BPI SA shares charged up 27% after Spain's Caixabank SA
offered to take over the rest of the Portuguese bank it doesn't
already own for roughly EUR1.09 billion euros ($1.24 billion).
Pandora A/S shot up 17%, driving to the top of the Stoxx 600.
The Danish jeweler said fourth-quarter sales jumped 40% and that it
will raise its annual dividend for 2015 by 38%.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires