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Treading water until election

Traders said all participants remained focused on attempts by European leaders to find a workable solution for Greece's debt and austerity woes and prevent it exiting the euro bloc.

Equity markets would be tossed around by opinion polls and commentary from political candidates in Greece until voters head to the polls again on June 17, Francesco De Stradis, investment adviser at Ord Minnett said. Until then, negative sentiment would prevail over the local market and probably push it lower, he added. ‘‘We’re just treading water watching what everyone else is doing at the moment.’’

Europe’s politicians are playing a ‘‘very high stakes game of poker’’ and a Greek exit from the euro would unleash ‘‘very significant’’ contagion, Carol Austin, investment services director at Contango Asset Management, said.‘‘The cost of bailing out Greece is cheaper than the cost to Europe of incurring a run on all its banks and a loss of confidence,’’ she said.

European leaders meeting in Brussels overnight said they will ensure more funds are provided to support Greece.Resources stocks held up despite disappointing Chinese manufacturing data showing a contraction for the seventh consecutive month as exports deteriorated according to global bank HSBC. ‘‘The resources sector did fall on the back of that,’’ Mr De Stradis.


Read more: http://www.smh.com.au/business/markets/greece-and-china-weigh-on-shares-20120524-1z62u.html#ixzz1vp3B408i