U.S. worries hit shares, euro subdued after Greek deal

Wed Nov 28, 2012 7:30am EST
 

By Marc Jones

LONDON (Reuters) - Shares, commodities and the euro fell on Wednesday as investors fretted about a lack of progress in U.S. budget talks and doubts crept in over Greece's new debt deal

U.S. Senate Majority Leader Harry Reid expressed disappointment on Tuesday over the progress of talks between Democrats and Republicans on avoiding the "fiscal cliff" - $600 billion in automatic tax rises and spending cuts due to start early next year.

This compounded investors' caution about the plan agreed by Greece's lenders late on Monday to reduce its debts. The deal opened the way for more aid to Athens to avoid a chaotic default, but some details remain unclear and analysts worry it will not do enough to make Greece's debt viable.

The FTSEurofirst300 .FTEU3 index of European stocks was down 0.2 percent by 6:45 a.m. EDT, giving up almost all of the previous session's gains.

London's FTSE 100 .FTSE, Paris's CAC-40 .FCHI and Frankfurt's DAX .GDAXI slipped between 0.1 percent and 0.3 percent and the MSCI index of global stocks .MIWD00000PUS was down just over 0.2 percent following falls in Asian equity markets.

"We have some aftermath effects of the Greek deal with investors probably reconsidering some of their optimism and focus is also shifting to the U.S. fiscal cliff issue," said Joost Beaumont a senior economist at ABN Amro.

"Risk sentiment has been a little bit hit by the comments by Harry Reid overnight ... We expect there will be a deal but it could be an 11th hour one which may not help confidence."

CLIFF HANGER   Continued...

 
People are reflected on an electronic board displaying a graph showing the movement of Nikkei share average outside a brokerage in Tokyo November 7, 2012. REUTERS/Toru Hanai