Stocks fall on yet more Greek delay problems

<p>European stocks pulled back on Friday with investors downsizing their risk into the weekend as yet more delays dragged Greece closer to default territory. The […]</p>

European stocks pulled back on Friday with investors downsizing their risk into the weekend as yet more delays dragged Greece closer to default territory.

The original deal between Greek political leaders yesterday has been quickly scuppered by additional austerity terms handed to them by the Troika (EU, ECB and IMF), as part of the second bailout package. This has put the cat amongst the pigeons when the situation looked to potentially have finally moved towards the finish line yesterday. And with evidence this morning of Greek opposition to some of these new conditions, the uncertainty is helping to convince investors to reduce their risk exposures into the market close ahead of the weekend.

Weaker than expected Chinese data also weighed on heavyweight mining stocks on the FTSE 100, contributing to much of the drag. Chinese imports last month fell 15.3%, the most since August 2009. Exports also fell 0.5%. This has escalated fears of slowing metal demand as China’s economy faces a slowdown and this has triggered investors into selling some of their holdings in mining stocks such as Kazakhmys and Anglo American. The FTSE 350 mining sector fell by 2.7% in trading as a result, with the banking sector also weighing on the Greek concerns by 1.3%.

Tobacco stocks have seen higher demand however, with the sector rallying 0.7%, and this gives an indication that investors have been diversifying their risk to defensive stock sectors today.

International Trade figures out of the US at 1.30pm GMT will be watched closely by investors, whilst US consumer sentiment data out at 2.55pm GMT will also likely influence how European stocks close out the week.

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