Asian equities fell and the euro slid a 3-week low on Thursday as another delay in the cementing of a crucial rescue plan for Greece underlines how far Europe has to solve a debt crisis that the stability of the financial system threatens. A three-hour teleconference between the eurozone finance ministers, not all the problems around a second support package for Athens to solve, to postpone a decision on the matter until Monday at the earliest.
“It is not clear whether Athens will be able to raise funds needed to repay bonds on March 20 to protect,” said Sumino Kamei, senior analyst at Bank of Tokyo-Mitsubishi UFJ.
Financial bookmakers expected European shares followed Asian shares lower, with financial spreadbetters calling the major indices in London. FTSE, Paris. FCHI and Frankfurt. GDAXI to open down 0.8 percent to 1 percent. . EU. L
U.S. Treasuries and the dollar, a slight increase, as investors sought safety while the riskier commodities lost ground.
“… It seems that the market is now in display mode after the strong growth in risk assets by investors reassess the risk / benefit assessment and strategies,” said Chris Weston, institutional dealer at IG Markets in Melbourne.
MSCI’s broadest index of Asia Pacific shares outside Japan. MIAPJ0000PUS fell 1.5 percent, more than wiping out all the benefits in the previous session, when riskier assets such as stocks and emerging Asian currencies rose broadly on hopes of Athens would eventually rescue resources may have.
The Japanese Nikkei. N225 outperformed its Asian peers to a six-month high record, before losing steam to close 0.2 percent. . T
The euro slipped 0.4 percent to a 3-week low to touch near $ 1.30 as uncertainty about the bailout package with the common currency under pressure again.
As a result of deep-seated distrust of the commitment of Greece to reforms in exchange for the rescue, some EU sources said on Wednesday that the eurozone’s financial officials were methods of delaying a part is still investigating whether the totality of the second bailout program while avoiding a disorderly default.
Delays could last until after the country holds an election expected in April, they said.
A debt swap agreement between Greece and private holders of Greek bonds, however, could continue, the possible use Greece to avoid missing the deadline March 20 for a 14.5 billion euro bond redemption payments.
Greece said it to all conditions set by the European Union and the International Monetary Fund met for a 130 billion emergency fund is needed to ensure that vital debt repayment date March meeting.
Besides hitting the stocks, jitters over Europe other riskier assets put under pressure. Copper lost more than 1.5 percent and oil also fell, while the commodity-linked Australian dollar fell slightly.
Asian credit markets weakened, another sign of declining confidence, with the spreads on the iTraxx Asia ex-Japan investment grade index widening by around 5 basis points.
The safe harbor dollar rose 0.2 percent against a basket of major currencies. DXY, while the yield on benchmark 10-year Treasury debt to 1.91 percent from 1.93 percent in late U.S. trade.
TIRED, not afraid
But while markets fell the decline appeared to be limited.
“The weakness was not intense, nor broad enough to be a” risk-off ‘event appear; markets looked tired, but not afraid, “Barclays Capital said in a note.
Data on Wednesday showed that the eurozone economy shrank at the end of 2011 and a mild recession probably as the debt-ridden south reels under the weight of the sovereign debt crisis. Larger economies, France and Germany may remain resilient.
On Wall Street, the CBOE Volatility Index VIX. VIX or “fear gauge”, while hovering near a 1-month high, seemed to be hedged. The index measures the expected volatility in the S & P 500 index. SPX over the next 30 days, and the rise is considered a sign of increased risk aversion.
Analysts say the markets are vulnerable to a number of corrections after rising since the beginning of the year in a move largely due to global liquidity injections by central banks aimed at the debt crisis and supporting economic growth.
The MSCI Asia ex-Japan Stock Index has risen nearly 14 percent this year, while the Nikkei added 9.5 percent and the S & P 500 Index. SPX 7 percent.
Gold has gained 10 percent and U.S. crude oil climbed nearly 11 percent.
U.S. crude eased 0.3 percent to $ 101.48 per barrel on Thursday after gaining more than a dollar the day before. Brent crude oil was little changed around $ 118.90, after scaling an 8-month high on Wednesday on concerns about supply disruptions.
U.S. data showed a solid foundation for economic recovery on Wednesday, with U.S. industrial production rose in January, a gauge of factory activity in New York hitting a 1-1/2-year high in February and optimism among homebuilders approaching a five-year high this month.
But U.S. stocks eased about half a percent after the Federal Reserve minutes of its January meeting showed some officials were concerned about high unemployment.
source:reuters
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