Euro, global shares fall as clock ticks on Greece

Mon Feb 6, 2012 8:58am EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Richard Hubbard

LONDON (Reuters) - Fears that Greece might not accept the painful terms of a proposed new bailout deal brought a rally in global shares and the euro to a halt on Monday, underming the positive effect of better global economic data.

U.S. stock index futures indicated that worries over Greece would prompt some retracement on Wall Street after a surprisingly strong U.S. jobs report pushed shares higher at the end of last week.

"Over the last 2-3 weeks, given risk assets were well bid, there was a tendency to see the glass half full and assume the negotiations would go smoothly," said Chris Turner, head of FX strategy at ING.

"There is a slight risk that this could all break down before March. I don't think a disorderly default is priced into the market at all."

Greek political leaders had on Monday still not agreed to accept deeply unpopular public wage cuts and other painful measures that international lenders are demanding as a condition of a second Greek bailout, which Athens needs to secure to avoid a disorderly default.

The slow progress to sort out the Greek mess has angered the country's European partners and undermined investor confidence across all markets.

The FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,073.76 points, while the euro zone's blue chip Euro STOXX 50 index was down 0.5 percent at 2,501.52 points, halting a seven-week rally during which the index has surged about 15 percent.

The euro was down 0.5 percent at $1.3073, having touched a low of $1.3030, after hitting a six-week high last week of $1.3235.   Continued...