Asian shares returned to a downtrend after the initial relief caused by news of Greece’s conditional bailout has given way to caution. In the meantime, European shares have gained yesterday but opened weak today. The agreement between Greece and its creditors has been accepted by creditors and is awaiting vote in the Greek parliament where it expected to pass, despite local opposition that insists that the reforms as part of the cash-for-reforms deal are extreme austerity measures. European shares have maintained their optimism yesterday but have opened today’s trading session with weakness. The UK’s FTSE 100 added 0.7% yesterday as major consumer names such as Tesco (LONDON:TSCO), WM Morrison Supermarkets PLC (LONDON:MRW) and International Consolidated Airlines add up to 2.8%. The German DAX added 1.2% as major financial corporations such as Commerzbank (XETRA:CBKG), Deutsche Bank (XETRA:DBKGn) and Deutsche Boerse (XETRA:DB1Gn) add between 2 and 3.8%. The French CAC added 1.7% with gains seen across all components. All three indexes have opened slightly weaker today.
Asian shares have shown mixed results after gaining for three straight sessions. The recent gains raised investors’ hopes that the most recent round of stabilization measures employed by Beijing would correct the massive declines seen in Chinese shares since June. Japan’s Nikkei 225 stock index outperformed other Asian indexes, adding 1.5%. MSCI's broadest index of Asia-Pacific shares outside Japan has erased earlier gains as it declined 0.1% after Chinese shares were lower. The CSI300 index of the largest listed companies in Shanghai and Shenzhen slipped 2.2% and Shanghai's benchmark composite index declined 1.6%.
In commodities, Crude oil slipped around 1.3% to trade at $51.5 per barrel and Brent crude declined nearly 1% to trade at $57.32 per barrel as news of a deal between the six world powers and Iran put oil under renewed pressure. The deal would see sanctions lifted from Iran, allowing the country to reenter the oil market. This has created wide concern that already-oversupplied market will face massive declines in prices.
The coming week holds a number of important economic data releases. Today UK inflation data will be released with the consumer price index (CPI). U.S. retail sales will be revealed later today, followed by API’s survey of crude oil inventories. Chinese GDP will be released tomorrow amid efforts to stabilize Chinese shares.