Europe close: Greek uncertainty drags on stocks

LONDON (ShareCast) - Uncertainty surrounding the future of Greece's financial situation sent European equities lower on Friday. Concerns over Greece's debt grew following a Reuters report that the government will need to use all its remaining cash reserves across its public sector to pay civil service wages and pensions at the end of the month.

The news came as the deadline for Greece's next debt repayment to the International Monetary Fund (IMG) loomed. The next payment of €195m is due on 1 May and another for €744.9m is due 11 days later.

IMF managing director Christine Lagarde on Thursday said the IMF would not allow Greece to delay a scheduled bailout payment.

Greece and its creditors are meeting in Brussels on Saturday (Shenzhen: 002291.SZ - news) for a new round of negotiations before a critical Eurozone finance ministers' meeting in Riga on 24 April.

"We believe the chances for a deal to be reached at the Eurogroup meeting on 24 April have significantly lowered in the past few days," Credit Suisse (NYSE: CS - news) said.

Elsewhere in Europe, consumer prices fell 0.1% year-on-year in March, easing from a 0.3% drop a month earlier, Eurostat confirmed.

The rate of deflation was as expected and the improvement backs the European Central Bank's (ECB) argument that its quantitative easing programme is having a positive effect on the economy. The euro was up 0.48% to $1.0813 after the CPI (Other OTC: CPICQ - news) report.

The euro gained 0.17% to $1.0779.

In the UK, unemployment fell to 1.84m between December and February, the Office for National Statistics said, while the jobless rate declined from 5.7% to 5.6%.

The number of people claiming Jobseeker's Allowance in March fell by 20,700 to 772,400.

Employment hit a new record high of 31.04m, growing by 248,000 from the previous quarter and registering the biggest increase in a three-month since April 2014.

Weekly earnings rose 1.8% in the three-month period, better than the 1.7% gain expected.

Ben Brettell, senior economist at Hargreaves Lansdown (LSE: HL.L - news) , said: "The Bank of England has previously said that it wants to see a marked increase in pay before judging that sufficient labour market slack has been eroded for interest rates to rise. If pay growth continues to improve, this removes a key barrier to higher interest rates." In the US, the CPI slipped by 0.1% year-on-year in March, dragged down by lower electricity and gas prices. Analysts had predicted zero growth.

A separate report from the University of Michigan showed consumer confidence rose more than forecast in April. The index for sentiment climbed to 95.9 this month from 93 the previous month, compared to estimates of 94.

Nestle (VTX: NESN.VX - news) , Syngeta decline Nestle was slightly lower as the food maker said that currency headwinds reduced first-quarter reported sales by approximately 4.5%.

Syngenta AG (Xetra: 580854 - news) slumped after reporting first-quarter sales that missed estimates.

Accor SA rallied after it reported an increase in first-quarter sales that beat analysts' estimates.

Abertis Infraestructuras SA dropped as an investor sold a 1.3% stake.

Brent crude fell 0.37% to $63.74 per barrel, and West Texas Intermediate dropped 1.48% to $55.88 per barrel, according to the ICE.