LONDON (TheDeal) -- European markets slid back Tuesday morning, with talks due to start again on Greek debt and both the British and Greek relationships with the European Union still weighing on sentiment.
British Prime Minister David Cameron did a U-turn yesterday on whether government ministers would have to follow the government line on whether to campaign for staying in Europe in a referendum. Previously he'd indicated that any minister who took a different tack would have to resign. Now he's leaving open the possibility of allowing cabinet ministers to campaign for an exit even if he himself believes he's won enough concessions on European reform to campaign to stay inside the Union.
On the brighter side, eurozone economic growth came in at 0.4% in the first quarter, according to revised figures from Eurostat -- that's faster than either the U.S. or the U.K. Meanwhile the U.K. saw a reduction in its trade deficit to £1.2 billion ($1.8 billion) in April, down from £3.1 billion in March.
In London, the FTSE 100 was down 0.64% at 6,746.46. In Paris, the CAC 40 was down 1.27% at 4,795.95. In Frankfurt, the DAX was down 1.56% at 10,892.56.
HSBC Holdings (HSBC), Europe's biggest bank, failed to move the markets with its announcement that it plans to axe up to 25,000 jobs, 8,000 of them in the U.K., and exercise its own pivot to Asia, increasing the region's share in its business. It also plans to sell the Turkish and Brazilian businesses, cut the number of branches worldwide and simplify and cut costs in its IT operations. But there was no announcement on whether the bank plans to carry out its longstanding threat to move its headquarters out of the U.K., a threat designed to put pressure on the British government to ease its tax burden. HSBC was down 0.74% at 614.9 pence.
Oxford Instruments (OXINF), a British technology and systems company, dropped 8.26% to 978 pence, after announcing a drop in pretax profits from £47.1 million in fiscal year 2014 to £35.6 million in fiscal year 2015. It partly blamed macro headwinds in Russia and Japan.
Private equity shop Kohlberg Kravis Roberts (KKR) said it sold a 21.6% stake in Pets at Home, the pet food, grooming and accessories retailer it brought to IPO last year, raising £288 million ($440 million). KKR still holds about 24.6% of Pets at Home. It sold the stake at 267 pence a share. By mid-morning Pets at Home was down 3.88% at 270 pence.
India-focused, London-listed Vedanta Resources (VDNRF) rose 6.43% to 579.5 pence after issuing a cryptic response to press speculation in India that it plans to merge with Cairn India, an oil company in which it already owns a controlling share. The move would allow Vedanta to reduce group debt by using the cash from Cairn. Mumbai-listed Cairn dropped 4.46% to Rs172.6 a share. Vedanta said only that it is committed to maintaining a premium listing in London and will make appropriate disclosures as and when required.
In Asia, Japan's Nikkei 225 was down 1.76% at 20,096.3, Hong Kong's Hang Seng closed down 1.20% at 26,989.52 and in China, the Shanghai Composite finished down 0.36% at 5,113.54. Bombay's Sensex 30 was down 0.1% at 26,495.9 in late afternoon trading.