TOKYO – Global stock markets sagged Tuesday as jitters mounted over whether Greece and its creditors can reach a bailout agreement.
KEEPING SCORE: France’s CAC 40 lost nearly 0.8 per cent to 4,776.37 in early trading. Germany’s DAX slipped 1.1 per cent to 10,867.06. Britain’s FTSE 100 edged down 0.4 per cent to 6,682.61. U.S. shares were set to fall, with S&P 500 futures 0.5 per cent lower to 2,066.3. Dow futures dropped 0.5 per cent to 17,626.
GREECE WORRIES: Global markets are getting shaken by Greece after weekend negotiations between the country and its creditors failed to get the struggling nation closer to a bailout deal. Greek leaders want to get access to the final 7.2 billion euros ($8.2 billion) of their bailout program that’s needed to pay debt and avoid a possible default that could trigger an exit from the euro; the bailout package expires at the end of the month.
THE QUOTE: “The worry lies in the possibility that the credibility of the EU may have suffered substantially, should Greece be allowed to go into cardiac arrest,” Bernard Aw, market strategist at IG in Singapore, said in a commentary. The issue could also spread to other “vulnerable EU countries such as Spain and Portugal to consider whether staying in EU is right for them,” he said.
FED POLICY: Markets are eyeing the U.S. Federal Reserve’s two-day June policy meeting, which kicks off later in the day. The big question is what clues the Fed will give about when it will start raising interest rates.
ASIA’S DAY: Japan’s Nikkei 225 dipped 0.6 per cent to 20,257.94 and South Korea’s Kospi lost 0.7 per cent to 2,028.72. Hong Kong’s Hang Seng fell 1.1 per cent to 26,566.70. Other Asian benchmarks, including Taiwan and Singapore, were also lower.
BANK OF JAPAN: Investors kept on eye on signals from Japan’s central bank, whose policies have sent the yen lower, working to help the nation’s giant exporters such as Toyota and Sony. Bank of Japan Gov. Haruhiko Kuroda’s comments in Japan’s parliament in the morning appeared to counter remarks he made last week that the yen wouldn’t continue falling.
CURRENCIES: The dollar continued to hold up after Kuroda’s comments, trading at 123.59 yen, up slightly from 123.52 yen. The euro was up at $1.1309 from $1.1247.
ENERGY: Benchmark U.S. crude oil recouped earlier losses, adding 59 cents to $60.11 a barrel in electronic trading on the New York Mercantile Exchange. The contract hit a high for the year last Wednesday. Brent crude rose 5 cents to $64.00 a barrel.