Stocks push lower on Greek concerns and profit taking

European stocks pushed lower as concerns over a potential Greek default triggered investors into profit taking, as EU leaders await coalition parties in Greece to formally accept fresh austerity demands as part of the new bailout terms.

With stock markets hitting new six-month highs on Friday, investors have been encouraged to take some profits off the table with the uncertainty concerning Greece.

The FTSE 100 lost 0.3%, whilst the DAX lost 0.4% and the CAC underperformer broader europe, losing 1% as French banks weighed.

That said, what we have seen so far today has been profit taking and nothing more. The near term bullish trend remains intact so far and there is every chance that if the FTSE can maintain its current momentum, the 6000 level could be reached soon. However, traders need to be mindful of any close below the 5820 support level on the FTSE, which may indicate a looming correction.

The Greece situation remains an unwelcome distraction to investors. One of the key issues surrounding the situation is the fact that nothing seems easy to agree, whilst at the same time, the goalposts consistently appear to move. Originally investors had heard that there was a lunchtime deadline put on Greece formally agreeing terms, but then this morning, a Greek government official told Reuters that there is no deadline due today to reach a deal before the EuroGroup meeting. The confusion left traders somewhat frustrated.

From a sector perspective, it is the miners and banks leading the fall lower, which is of course no surprise considering it was these two sectors that led the charge higher last week. The FTSE 350 mining sector and FTSE 350 banking sector both lost over 1% in early trade as investors took some profits off the table. The mining sector alone has rallied 20% in 2012 up until Friday’s highs and so naturally, with the Greece situation sapping the general risk appetite today, some profit taking in this area can be understood.

There is a lack of significant economic data due out today, with the headline figure being German manufacturing orders out at 11am GMT.

Randgold Resources the top gainer
Share prices in gold miner Randgold Resources rallied 3% straight to the top of the FTSE 100 leader board, after the gold miner reported a 259% increase in profit for 2011 whilst also doubling its dividend. Profits hit $433.4m after output increased by 58% to 696,023 ounces in the year, whilst the dividend rose to $0.40, double that of which it paid to shareholders a year earlier.