Stocks markets in Europe and Asia continued to decline yesterday and today while Wall-Street shares rose. Eurozone officials have provided Greece with a new deadline for offering a new cash-for-reforms proposal. The proposal must be submitted by the end of the week in order to keep Greece’s banks from collapsing and the country leaving the shared currency bloc. German Chancellor Angela Merkel further urged Greek Prime Minister Alexis Tsipras to provide a proposal on Thursday so that the German parliament may authorize new aid negotiations this week. European stocks have continued to decline on Tuesday. The UK’s FTSE 100 fell 103.47 points, or 1.58% to close Tuesday’s trading session at 6432.21. The German DAX fell 213.85 points, or 1.96%, to trade at 10676.78. The French CAC 40 led the declines with a 106.9-point fall (2.27%) to trade at 4604.64.
China stocks have fallen to four-month lows early on Wednesday despite government attempts to stabilize the markets. More worryingly, nearly half of the listed Chinese companies have opted to halt trading in an effort to avoid the broad declines. The Shanghai Composite Index opened 7% lower but managed to cut back losses down to 3.9% during the day. The CSI300 Index of China‘s biggest companies fell 4.8% and the Hong Kong market fell over 4%. China’s stock market has already tumbled 30% since mid-June, reversing a nearly yearlong period of bullish trading. Despite numerous government support measures the declines continues.
U.S. stocks, however, reversed the trend and registered gains on Tuesday. Stocks brushed aside Greece and China-related fears for a stunning mid-day comeback after a weak morning. The relief came after news reports indicated that Greece is focusing on an interim proposal that would secure funding until the end of the month. The S&P 500 Index added 12.59 points, or 0.6%, to trade at 2081.35. The Dow Jones Industrial Average added 93.33 points, or 0.5% to trade at 17776.91. The NASDAQ rose 5.52 points, or 0.11%, to trade at 4997.46.
The Federal Reserve is set to hold its Federal Open Market Committee (FOMC) today. While a rate hike isn’t expected today, the Fed’s wording may provide a strong indication for when a rate hike will occur. U.S. crude inventories are also expected to release later today. Crude oil has shown significant declines in the last few days, a trend that may be reversed or strengthened by this report.