Euro falls vs US dollar with more losses eyed
The euro slid against the U.S. dollar on Monday as new governments in Italy and Greece failed to ease fears about the euro-zone sovereign debt crisis, a crisis that German Chancellor Angela Merkel termed Europe's "toughest hour since World War Two."
Italy paid a euro-era high price to sell five-year bonds on Monday, just a day after former European Commissioner Mario Monti was named to lead the country -- a move that had been hoped would help restore investor confidence.
News that Italian Treasury Director General Vittorio Grilli is considering resigning as early as Tuesday to take up a job in the private sector with investment bank J.P. Morgan, according to sources, added to the euro's woes.
In Greece, new Prime Minister Lucas Papademos, a former European Central Bank vice president, will have to win Wednesday's confidence vote in his cabinet before meeting euro-zone finance ministers in Brussels on Thursday, as uncertainty persisted over whether Athens will receive the next tranche of aid to avoid a default.
Papademos said on Monday that Greece's only choice was to remain in the euro zone, and the country had to widen its tax base and fight rampant tax evasion, a problem identified by economists as a serious hindrance to Greece's budget performance.
German Chancellor Angela Merkel warned that Europe faced its "toughest hour since World War Two" and urged her party to set aside misgivings about the euro and accept closer political integration as a solution to the bloc's deepening debt crisis.
But she offered no new ideas for resolving the crisis that has forced bailouts of Greece, Ireland and Portugal, and stirred doubts about the survival of the 13-year-old currency area.
Wall St falls as euro-zone bond yields rise
U.S. stocks fell on Monday as rising bond yields in Italy and other euro-zone countries reminded investors that despite changes in governments, the region's debt crisis could still spin out of control.
Initial relief over the appointment of a technocrat to head the new government in Italy after the resignation of Silvio Berlusconi gave way to worries that unpopular austerity measures will not be enough to fix the country's finances.
Benchmark yields in Italy, France and Spain edged higher from the end of last week and closed near session highs. Rising bond yields are being watched carefully because every rise in interest rates threatens the ability of Italy and other countries to finance themselves.
Stocks have lately focused on headlines from Europe as traders react to the escalating sovereign debt crisis in the euro zone. Italian benchmark bond yields rose above 7 percent last week, a level that forced countries with a lower debt burden to seek bailouts. With debt of more than 2 trillion euros, Italy is considered too big to bail out.
The Dow Jones industrial average <.DJI> dropped 74.70 points, or 0.61 percent, at 12,078.98. The Standard & Poor's 500 Index <.SPX> fell 12.07 points, or 0.96 percent, at 1,251.78. The Nasdaq Composite Index <.IXIC> lost 21.53 points, or 0.80 percent, at 2,657.22.
Gold drops on dollar rise, tracks weak equities
Gold fell on Monday on a stronger dollar, tracking riskier assets as investors once again focused on the huge euro zone sovereign debt problems after initial optimism as Italy and Greece rushed to form governments.
Bullion was pressured as the euro tumbled against the dollar after German Chancellor Angela Merkel said that Europe could be living through its toughest hour since World War Two, and as Italy paid a euro-lifetime high price to sell five-year bonds to wary investors.
The yellow metal -- a traditional safe haven which has recently taken to tracking the equity markets -- was still over 1 percent higher in the last two sessions on some hopes for Europe's debt crisis. Bullion prices were also supported by a bullish forecast by Goldman Sachs.
U.S. gold futures for December delivery <GCZ1> settled down $9.70 at $1,778.40 an ounce. Trading volume was below 90,000 lots, preliminary Reuters data showed, set to be one of the weakest sessions this year.
Crude ends down on euro zone recession fears
U.S. crude futures fell on Monday as data showing a sharp drop in euro zone industrial production stoked worries the region could slide into recession, painting a gloomy outlook for world oil demand.
New leaders in Italy and Greece began to form governments, but a market rally reflecting optimism about their appointment stalled.
Italy had to pay a euro-lifetime record to sell five-year bonds as investors were wary of buying until Mario Monti, the prime-minister designate, can launch serious economic reforms.
New Greek Prime Minister Lucas Papademos faced his first problem: the head of the main conservative party rejected any toughening of austerity measures and refused to sign a letter that would convince European leaders Greece was earnest in carrying out reforms.
A Reuters poll ahead of weekly inventory reports forecast that domestic crude stocks declined by 1.1 million barrels last week. The poll also forecast that distillates fell 2.2 million barrels and gasoline stocks dipped by 700,000 barrels. [EIA/S]
On the New York Mercantile Exchange, December crude <CLZ1> fell 85 cents, or 0.86 percent, to settle at $98.14 a barrel.
Nikkei to open down as euro zone worries persist
The Nikkei stock average is set to slip on Tuesday, tracking falls in overseas shares on concerns about rising bond yields in Italy and other euro-zone countries.
Yields of Italian five-year bonds reached a record of 6.29 percent on Monday, up nearly a full percentage point from the last auction in mid October, and benchmark yields in France and Spain closed near session highs.
U.S. and European shares, led by financials, fell sharply on the news, reminding investors the region's debt crisis could still spin out of control.
Nikkei futures in Chicago ended at 8,575, down 45 points from their Osaka close of 8,620. <JNIc1>. The Nikkei <.N225> is likely to trade in a range of 8,500 to 8,600 on Tuesday, strategists said.
On Monday, the benchmark Nikkei <.N225> rose 1.1 percent to 8,603.70 and the broader Topix index <.TOPX> added 0.9 percent to 735.85.
Seoul shares seen lower; SK Tel eyed after Hynix deal
Seoul shares may open lower on Tuesday as rising bond yields in Italy and other euro zone countries rekindled worries that the debt crisis in Europe is a long way from being resolved, even after leadership changes in Italy and Greece.
German Chancellor Angela Merkel said on Monday that Europe could be living through its toughest hour since World War Two as new leaders in Italy and Greece rushed to form governments and limit the damage from the euro zone debt crisis.
Banking stocks such as KB Financial Group <105560.KS> may come under pressure after their U.S. peers fell sharply.
Memory chip makers like Samsung Electronics <005930.KS> and Hynix Semiconductor <000660.KS> may also decline after the U.S. Philadelphia semiconductor index <.SOX> lost 1.3 percent overnight.
The Korea Composite Stock Price Index (KOSPI) <.KS11> ended up 2.1 percent at 1,902.8 on Monday.
HK shares seen lower, banks eyed as BofA sells CCB stake
Hong Kong shares were set to dip on Tuesday as the spike in euro zone bond yields pointed to weak investor appetite, and financials were likely to be the biggest drag following Bank of America's <BAC.N> further stake sale in CCB <0939.HK>.
The Hang Seng index <.HSI> ended up 1.9 percent at 19,508.18 points with consumer-related names driving gains although flagging turnover suggested investors remained wary.
That caution stemmed in part from developments in Europe. Italy paid a record euro-era high to sell five-year bonds, and German Chancellor Angela Merkel said Europe may be living through its toughest hour since World War Two.
Further keeping a check on any upside, banking shares, the heaviest weighted in regional benchmark indices, were expected to be on the backfoot after Bank of America decided to sell most of its remaining stake in China Construction Bank <0939.HK> for $6.6 billion.
Elsewhere in Asia, Japan's Nikkei <.N225> was down 0.4 percent while South Korea's KOSPI <.KS11> was off 0.2 percent as of 00.55 GMT.
Source : Reuters
Tidak ada komentar:
Posting Komentar