Wounds Seen Slow To Heal For Europe Stocks As Italy Leads Swings
?By Sofia Horta E Costa
While relief over Greece prompted the biggest European stock rally since 2011, the legacy for investors is volatility.
After slumping to a five-month low, the Euro Stoxx 50 Index rebounded 9.5 percent in five days, falling as much as 0.5 percent on Tuesday before ending up. Its average daily move now stands at 1.7 percent in July, the most in almost four years. Portuguese and Italian shares led the swings, with average gains or drops of about 2 percent each day.
?We?re by no means out of the woods yet, and markets are fully aware of that,? said Rosamunde Price, who helps oversee about $14 billion as chief investment strategist at Seven Investment Management in London. ?Investors have enjoyed a nice rebound in the run-up to a settlement, but the mood this week is still pretty cautious. Remember that peripheral stocks can nosedive as easily as they can rally.?
The first hurdle comes Wednesday, when Greek Prime Minister Alexis Tsipras needs to secure parliamentary approval for the austerity measures demanded by creditors to begin talks over financial aid. With the long-term stability of the country?s economy and its government at stake, Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. are among those saying that risks remain.