|
 There was also a new 5-1/2 year low for oil prices as persistent
worries about a global supply glut amplified the downward pressure
of its pricing currency, the dollar, as it hovered near an 8-1/2
year high.
Europe's stock markets opened with Britain's FTSE 100, Germany's DAX
and France's CAC 40 down 0.5, 0.6 and 0.8 percent respectively after
a 1.6 percent drop for Tokyo's Nikkei had also seen Asia wilt
overnight.
Bond markets were slightly brighter though, as Greece's bond yields,
a proxy of the government's borrowing costs, steadied after spiking
on Monday when it became clear the country would hold snap
elections.
The left-wing Syriza party, which opposes Greece's EU/IMF bailout
and which is leading in opinion polls, has said it wants to abandon
the many of the drastic spending cuts that are central to Greece's
rehabilitation program.
"The developments in Greece have prompted some concerns among global
investors, at least in the near-term, which is boosting safe-haven
demand for the yen," said Lee Hardman a FX strategist at Bank of
Tokyo Mitsubishi.
"It's probably fair to say Greece could leave the euro and it would
have less of an impact than in 2012, but it would be dangerous," he
said.
The euro was holding just above a 2-1/2 year low against the dollar
at $1.2171. Underscoring the euro zone's economic troubles, European
Central Bank data showed banks had slowed lending to firms and
households again in November.
OIL SLUMP
Oil prices, the other big focus for world markets at present,
extended their sharp recent falls in early European trading as they
dropped below $57 per barrel for the first time since May 2009.
Brent for February delivery fell 98 cents to $56.90 after hitting
$56.74 earlier in the session, while U.S. crude fell 77 cents to
$52.84 a barrel. Both have fallen roughly 50 percent in the last six
months.
An industry group, the American Petroleum Institute, is scheduled to
release its inventory report later in the day ahead of U.S.
Department of Energy data on Wednesday.
[to top of second column] |
In the currency market, the cautious mood saw the yen make sharp
gains against both the dollar and euro as investors sought the
traditional safety of the Japanese currency.
It was up just over one percent at 119.45 yen to the dollar as the
dollar itself held just below an 8-1/2 year high against six of the
world's main currencies.
Europe's benchmark safe haven, the 10-year German Bund, meanwhile
was heading for its biggest annual fall in yields since 2008 as it
hovered at 0.55 percent in early trading.
Gold also nudged higher but the dollar's broad-based strength meant
more pain for other commodities. Copper edged down to $6,280.25 a
tonne, after falling to its lowest level in four-and-a-half years
this week.
Worries about China's economy added downward pressure. Growth in
China's manufacturing sector likely slowed to a 18-month low in
December, a Reuters poll showed earlier.
(Additional Reporting by Lisa Twaronite in Tokyo; Editing by Jon
Boyle)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
