Markets nervous as euro ministers meet on Greece
- Article by: PAN PYLAS
- Associated Press
- November 26, 2012 - 5:09 AM
LONDON - Concerns that European finance ministers will again fail to reach an agreement on handing over more bailout cash to Greece weighed on markets Monday.
Most attention will focus on the finance ministers meeting in Brussels though election results in the Spanish region of Catalonia that saw separatists gain ground have also added to investor worries at the start of the week.
For weeks, the eurogroup of finance ministers have failed to agree a strategy that will allow them to release some (EURO)44 billion ($56.8 billion) for the cash-strapped country.
The expectation is that Greece will get the money and an extra two years to make the reforms that are a condition of the bailout. But an extension would cost the eurozone several billion more and finding that money has lain at the heart of the current stalemate.
Several proposals to plug the financial gap have been proposed, including reducing the interest rate Greece pays on loans it is getting from euro partners and the International Monetary Fund. Time is short as Greece is running out of the money it needs to pay its day-to-day running costs.
"Clearly any decision by the eurogroup to kick the Greek issue further down the road will stand to unsettle markets globally," said Fawad Razaqzada, market strategist at GFT Markets.
In Europe, the FTSE 100 index of leading British shares was down 0.4 percent at 5,795 while Germany's DAX fell 0.2 percent to 7,291. The CAC-40 in France was 0.6 percent lower at 3,509.
The euro meanwhile lost some of its shine but remains near multiweek highs against the dollar. Europe's single currency was down 0.1 percent at $1.2964.
Wall Street was poised for a retreat at the open too. Dow futures and the broader S&P 500 futures were 0.5 percent lower.
The expected falls in the U.S. come despite signs that the crucial holiday shopping season has got off to a solid start.
Surveys showed that Americans visited stores and websites in record numbers last Friday, the day after the Thanksgiving holiday. That day is dubbed "Black Friday" because U.S. retailers traditionally turn a profit as millions of Americans rush out to stores in search of gifts for Christmas and other celebrations.
The surveys showed a record 247 million shoppers visited stores and websites between Thursday and Sunday, up 9.2 percent from the year before.
Earlier, Asian markets failed to make much headway, if any.
While Japan's Nikkei 225 index rose 0.2 percent to 9,388.94, Hong Kong's Hang Seng was sapped of momentum by lethargic mainland Chinese markets, closing 0.3 percent lower at 21,857.77.
In China, the Shanghai Composite Index was down 0.5 percent to 2,017.46 while the smaller Shenzhen Composite Index lost 1.4 percent to 789.49.
Oil prices tracked equities lower, with the benchmark New York rate down 56 cents at $87.72 per barrel in electronic trading
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