Greece weighs on Europe, China cut keeps shares steady
By Marc Jones
LONDON (Reuters) - China's interest rate cut kept shares worldwide near record highs on Monday, though euro zone bourses, bonds and the euro were pegged back by a lack of progress in resolving Greece’s financing woes.
China's third rate cut in six months on Sunday saw Asian markets get the week off to a solid start, but Europe was cautious as euro zone finance ministers prepared to meet in Brussels to try to find a way to keep Greece afloat.
Athens has to repay 750 million euro to the International Monetary Fund on Tuesday. France's Finance Minister Michel Sapin said Monday's meeting would be not be "decisive", though he had no doubt a deal would come eventually.
The jitters however meant most of the euro zone's stock markets <0#.INDEXE> and its bonds started lower, though outperformance by Britain's FTSE after Friday's post-election jump kept the FTSEurofirst 300 about level.
The euro bore the brunt of the angst, falling half a percent to $1.1157, well below the two-month peak of $1.1392 struck last week.
"I get the feeling in the market that there are increasingly more people who are positioning for a Grexit," Credit Agricole's European head of FX strategy, Adam Myers, said.
"More and more people seem to be taking a pessimistic view. That wasn't there even a month ago."
Two-year Greek yields edged up 35 basis points to 20.86 percent and Greek stocks, which rallied sharply last week, were down 2.3 percent. Continued...