European Markets Extended Recent Downward Trend

(RTTNews) - The European markets finished to the downside at the start of the new trading week, extending the weak performance of the previous week. The weakness in the European bond market continued during Monday's session. Greece also remained in focus amid reports that its creditors are losing patience with the country's uncompromising and incomprehensible stance on its debt obligations.

The Greek government and creditors are set to resume their talks in Brussels on Monday after the both parties failed to reach an agreement on deal last week.

Negotiations to address the differences on proposals are inevitable as Greece cannot make further repayment without new external funds.

Greece asked the International Monetary Fund last week to bundle the four payments due to the lender this month, totaling 1.6 billion euros, into a single payment. IMF rules permit Greece to opt for bundling its loan repayments

Athens has to reach a consensus with lenders to free up bailout fund and avert a default before the June 30 deadline.

The French economy is expected to sustain its growth momentum in the second quarter as industrial production and services activity is set to continue expansion in June, survey data from the Bank of France showed Monday.

The bank retained its growth projection for the second quarter at 0.3 percent. In the first quarter, the economy had expanded 0.4 percent.

The United Kingdom's growth outlook was downgraded largely due to weaker-than-expected first quarter gross domestic product growth, the Confederation of British Industry showed Monday.

The business group lowered the growth outlook for this year to 2.4 percent from 2.7 percent predicted in February. For 2016, the growth forecast was lowered to 2.5 percent from the previous estimate of 2.6 percent. Growth in 2014 was 2.8 percent.

British economic growth is set to sustain its solid growth momentum, but the country's high debt burden is likely to remain a weakness, which is unlikely to drop before 2017, Moody's Investors Service said in a report on Monday.

The rating agency forecast real GDP to increase 2.7 percent and 2.4 percent this year and next, respectively.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased by 1.03 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.70 percent.

The DAX of Germany dropped by 1.18 percent and the CAC 40 of France fell by 1.28 percent. The FTSE of the U.K. declined by 0.21 percent and the SMI of Switzerland finished lower by 0.49 percent.

In Frankfurt, Deutsche Bank increased by 3.87 percent. The lender announced Sunday that its co-Chief Executive Officers Anshu Jain and Jürgen Fitschen resigned. They will be replaced by John Cryan, effective July 1. Peer Commerzbank also gained 1.05 percent.

Daimler declined by 1.80 percent and BMW lost 2.11 percent. Volkswagen also finished down by 1.36 percent.

RWE weakened by 1.81 percent and E.ON surrendered 1.54 percent.

In Paris, Renault dropped by 2.05 percent and Peugeot fell by 2.78 percent.

Total decreased by 3.01 percent, but Technip gained 0.81 percent.

In London, Diageo surged by 6.79 percent. The stock was raised to "Neutral" from "Underweight" at JP Morgan. Brazilian billionaire Jorge Paulo Lemann is reportedly in talks to acquire the company.

Shire declined by 2.75 percent. The British Pharmaceutical firm is considering a 12 billion British pound or $18.32 billion bid to acquire Swiss rival Actelion Ltd., according to a Sunday Times report. Actelion soared by 5.84 percent in Zurich.

Syngenta dropped by 1.62 percent in Zurich. The company has rejected a second takeover proposal from U.S. company Monsanto.

Eurozone investor confidence declined to a four-month low in June, survey data from the think tank Sentix showed Monday. The investor confidence index fell to 17.1 in June from 19.6 in May. This was the lowest reading since February, when the score was 12.4. The reading was above the expected score of 18.9.

Germany's exports increased unexpectedly in April and industrial production rebounded at a faster-than-expected pace suggesting that the economy has not lost its steam.

Exports rose a seasonally and calender-adjusted 1.9 percent month-on-month in April, faster than previous month's 1.3 percent increase, provisional data from Destatis showed Monday.

This was the third consecutive rise in exports and came in contrast to a 0.4 percent drop forecast by economists.

Meanwhile, imports fell 1.3 percent in April from the prior month, in contrast to economists' expectations for a 0.5 percent rise. It was the first decrease in three months. In March, imports grew 2.4 percent.

Elsewhere, industrial production expanded 0.9 percent month-on-month in April, reversing a revised 0.4 percent fall in March, another report showed today. It was larger than an expected 0.5 percent increase and also the biggest growth seen so far this year.

Chinese exports fell less than expected in May, while imports declined sharply lifting the trade surplus notably to an above expected level.

Exports dropped 2.5 percent in May from a year ago, data released by the General Administration of Customs showed Monday. Shipments were forecast to decline by 4.4 percent after contracting 6.4 percent in April.

At the same time, imports plunged 17.6 percent, bigger than a 10 percent fall forecast by economists. Imports had decreased 16.2 percent in April.

Consequently, the trade surplus rose to $59.49 billion from $34.1 billion in April. It was expected to rise to $44.8 billion.