World markets lower on Greece vote; Oil price in decline
The decision by the Greek people to reject the bailout proposal from their country’s creditors has sent ripples around the world. Uncertainty now surrounds the future of Greece’s position in the euro and the EU resulting in nervous investors. Asian markets were first to end with losses following a sell-off; only China managed gains following Beijing’s announcement of further support for the country’s economy. European markets closed lower. North American stock markets closed with slim losses having recovered from a steeper fall in early trading. Losses were mitigated by the expectation of a Greek no vote.
The S&P/TSX Composite Index closed down 88.82 (0.60 per cent)
The NYSE closed lower
Oil is trending lower (Brent $56.78, WTI $52.78 at 4.25pm)
Gold is trending higher
The loonie is valued at U$0.7901 (at 4.25pm)
Bank of Canada highlights optimistic signs
The Bank of Canada says that the oil sector’s weakness could still prompt a cut in interest rates despite some positive indicators for the economy. The stronger US economy and weaker Canadian dollar is setting up potential for growth and the bank’s survey of business sentiment shows an optimistic outlook. The next date for a potential interest rate cut is next Wednesday, July 15.
Business spending to slow says StatsCan survey
Businesses are planning to spend almost 5 per cent less this year compared to 2014 according to a new survey from Statistics Canada. Expenditure in non-residential construction and machinery and equipment are set to fall by 4.9 per cent to $251.8 billion. Public sector capital spending is expected to decrease 0.2 per cent and private sector capital expenditure is anticipated to fall by 7.0 per cent, mainly as a result of lower spending in the mining, quarrying, and oil and gas extraction industry. Capital expenditure in the professional, scientific and technical services sector is expected to decline 23.2 per cent to $2.0 billion. Transportation and warehousing is expected to see the largest increase with manufacturing and educational services also spending more.
Manulife puts Singapore real-estate IPO on hold
The $420 million IPO of a real estate investment trust in Singapore has been put on hold by Canada’s Manulife Financial due to weakness in global markets. As Asian stocks fell Monday following the Greek vote Manulife decided that it would not be the right time to launch the IPO, which would have been the largest in the city state so far this year. The company said it may go ahead at a later date depending on market conditions.