European Stocks Inch Toward Correction as Greek Talks Drag on

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Photographer: Kostas Tsironis/Bloomberg

European stocks extended a four-month low, coming within 0.1 percent of a correction, as Greece attempted to secure a rescue and stay in the euro.

The Stoxx Europe 600 Index lost 1.6 percent to 372.74 at the close of trading, reversing gains of as much as 0.4 percent. Italian shares fell the most among western-European markets, with the FTSE MIB Index dropping 3 percent after entering a correction on Monday. Portugal’s PSI 20 Index slid 2.2 percent.

“Week by week, we’re seeing markets enter corrections as Greece steps closer to the edge,” said Alessandro Bee, a strategist at Bank J Safra Sarasin, said by phone from Zurich. “We have moments of panic and then take a few days to digest things. I think that will continue as long as the Greek issue drags on.”

The Stoxx 600 slid on Monday after Greeks voted against austerity measures in a referendum. The gauge has tumbled 9.98 percent from its April record. Greece will put its economic proposals in writing, in a first step toward restarting aid talks, Dutch Finance Minister Jeroen Dijsselbloem said Tuesday. Euro-area leaders gather at a summit after markets close, while the region’s finance ministers will discuss Greece’s request on a call Wednesday.

The crisis is hurting stocks that had basked in the glow of the European Central Bank’s stimulus program in the first quarter. Spain’s IBEX 35 Index and France’s CAC 40 Index also entered corrections on Monday. Half of the 18 western-European markets tracked by Bloomberg fell 10 percent or more from their 2015 highs through Monday.

Greek ETF

Greece’s stock market will remain closed on Tuesday and Wednesday as banks remained shut. A U.S.-listed exchange-traded fund tracking Greek equities slipped 3.7 percent, extending yesterday’s selloff.

Technip SA tumbled 8.3 percent after after saying it will take a one-time charge of 650 million euros ($717 million) for the restructuring. That dragged energy producers to the one of the worst declines among industry groups in the Stoxx 600. Miners and automakers also tumbled.

Axel Springer SE advanced 2.2 percent after people familiar with the matter said it is in talks to combine with and ProSiebenSat.1 Media AG.

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