Asian stocks and
the euro fell on Thursday as markets erred on the side of caution over
the ongoing Greek debt negotiations amid conflicting headlines on
progress in the talks.
The uncertainty is
expected to be highlighted in a mixed open for European bourses with
spreadbetters forecasting Britain's FTSE to fall as much as 0.1 percent,
Germany's DAX up 0.3 percent and a flat start for France's CAC.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.5 percent on a broad decline in markets from Australia to China. Japan's Nikkei bucked the trend and gained 1.9 percent thanks to a significantly weaker yen.
CNBC
reported late on Wednesday that an agreement in principle was in place
between Greece and other euro zone governments, lifting risk appetite
briefly. Luxembourg's finance minister also said his euro zone
counterparts agreed on a way forward to deal with Greece's financing
problems.
Still, the situation appears far from clear with Reuters reporting that there was no deal yet and a Greek government official insisting there could be no extension of the bailout.
"This
Greek drama has been a huge overhang over the market. We've been held
hostage and ignoring all sorts of other news, for example good economic
news on the jobs front, earnings that have been more good than bad,"
said Art Hogan, chief market strategist at Wunderlich Securities in New
York.
"Nobody was wanting to have a sloppy Greek exit disrupt the markets right now in what is a fragile European economy to begin with."
Market participants awaited a European Council meeting later on Thursday to gauge whether in fact the debt negotiations were moving forward.
In currency markets, the euro dipped as the market tried to digest the conflicting Greek headlines, slipping 0.2 percent to $1.1311 from a high of $1.1353.
The dollar traded at 120.27 yen, holding within striking distance of a five-week peak of 120.48 reached amid brightening outlook for the U.S. economy and a corresponding rise in Treasury yields.
The Aussie was down 0.8 percent at $0.7660, not far off a six-year low of $0.7627 plumbed last week when the RBA cut rates to a record low 2.25 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.5 percent on a broad decline in markets from Australia to China. Japan's Nikkei bucked the trend and gained 1.9 percent thanks to a significantly weaker yen.
Still, the situation appears far from clear with Reuters reporting that there was no deal yet and a Greek government official insisting there could be no extension of the bailout.
"Nobody was wanting to have a sloppy Greek exit disrupt the markets right now in what is a fragile European economy to begin with."
Market participants awaited a European Council meeting later on Thursday to gauge whether in fact the debt negotiations were moving forward.
In currency markets, the euro dipped as the market tried to digest the conflicting Greek headlines, slipping 0.2 percent to $1.1311 from a high of $1.1353.
The dollar traded at 120.27 yen, holding within striking distance of a five-week peak of 120.48 reached amid brightening outlook for the U.S. economy and a corresponding rise in Treasury yields.
The Aussie was down 0.8 percent at $0.7660, not far off a six-year low of $0.7627 plumbed last week when the RBA cut rates to a record low 2.25 percent.
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