European markets buck China concerns

Tue May 5, 2015 5:08am EDT
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LONDON (Reuters) - European markets opened firmer on Tuesday after an extended weekend break, bucking fears of slowing demand from China and despite debt stand-off fears depressing Greek stocks.

The pan-European FTSEurofirst 300 equity index was up 1 percent, with UBS shares gaining more than 7 percent the bank reported its highest quarterly profit in nearly five years and said it was in advanced U.S. talks to settle allegations of foreign-exchange-market rigging.

Britain's FTSE 100 index was up 0.9 percent after a three-day weekend and Germany's DAX rose more than 1 percent, helped by Infineon raising its 2015 outlook.

Greece's debt stand-off with international creditors sent the ATG benchmark index down 2 percent. Differences over pension and labor reforms are dogging intensive negotiations as the country's cash position becomes increasingly critical.

Fears of an imminent crisis pushed up low-rated euro zone bond yields and the euro eased a little against the U.S. dollar.

"We really do think time is running out over Greece. Everything has pointed to this being the week in which a deal needs to be done," Charles Stanley market analyst Jeremy Batstone-Carr said.

"Greece is having huge difficulties making payments to the IMF, and the IMF is in no mood to soften its stance."

Data from China, Taiwan and Japan showed factory activity contracting, while Australia's central bank cut interest rates for the second time in four months as the region's growth falters in the face of slowing Chinese demand.

The Shanghai Composite Index fell more than 4 percent, fueled by media reports of tougher margin requirements by some brokerages. That added to concerns about market liquidity ahead of new share listings.   Continued...

An office worker is reflected in the window of the Australian Securities Exchange building displaying the ASX50 curve for Wednesday in central Sydney August 7, 2013. REUTERS/Daniel Munoz