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Markets rattled as Greece creditors reject proposals

Investors rushed to buy low-risk German bonds and gold, and sell risky shares and bonds, as negotiations between Greece and its creditors broke down yesterday, writes Donal O'Donovan

European shares lurched lower, and US stock futures extended losses, after a Greek government official said the country's creditors had rejected its latest proposals.

According to a statement from Greek Prime Minister Alexis Tsipras' office, creditors had already rejected some of Greece's proposals before he left for talks in Brussels.

It sent markets into a sell-off, though losses were pared after a European Union official said talks with Greece were still going on and that Mr Tsipras would still meet the creditors as planned. After months of taking Greece's inconclusive debt negotiations in their stride, markets are now rattled.

"Most people were assuming they'd agree on something," said Alan McQuaid, chief economist at Merrion Stockbrokers. "I was quite relaxed thinking a deal might get done and now you get this bombshell... Is that the end of it? I don't know."

European leaders are facing into a two-day summit in Brussels, while Mr Tsipras is engaged in a round of talks with the heads of the European Central Bank, the International Monetary Fund and the European Commission.

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