Euro
advances for 2nd day, but gains seen limited
The euro rose against the dollar and yen
for a second straight session on Wednesday as investors continued to pare
extremely bearish positions ahead of crucial Greek elections, but concerns
about Spanish and Italian debt yields could spur a reversal.
Investors covered their short positions on
the euro ahead of the elections in Greece on Sunday, with the outcome too close
to call. Syriza, the leftist party opposed to austerity measures, and the New
Democracy group, which backs Greece's international bailout, are locked in a
tight race and investors are only too willing to sit on the sidelines and await
the results.
In late afternoon trading the euro
<EUR=> last traded up 0.4 percent at $1.2565, its strongest gain in a
week. That was well above the near two-year low touched on June 1 at $1.2288,
but below a three-week high reached on Monday at $1.2671.
Traders said if Italian and Spanish bond
yields continued to edge toward perceived unsustainable levels of around 7
percent, the euro may well come under more pressure in the near term.
Italy faces a test on Thursday, when it
plans to offer up to 4.5 billion euros ($5.66 billion) of fixed-rate bonds.
The dollar, meanwhile, turned negative
against the Japanese yen after the government reported U.S. retail sales fell
for a second straight month in May. Excluding autos, retail sales showed their
biggest monthly decline in two years.
The dollar was down 0.1 percent against the
yen at 79.45 yen <JPY=>, according to Reuters data.
Wall
St sells off late, succumbs to Europe fears
Wall Street ended lower on Wednesday as
fears ahead of the weekend elections in Greece finally drove down a market that
had been treading water through most of the day.
Up to 800 million euros ($1 billion) have
been pulled out of Greek banks daily ahead of the cliffhanger election on
Sunday, which many fear will result in Greece leaving the euro zone. If that
happens, investors fear other peripheral nations may also have to exist.
The euro zone's cloudy future has made
investors inclined to quickly reverse positions. On Wednesday, they pounded
shares in financial, energy and materials sectors into the close.
Volume surged after three weak sessions.
About 7.1 billion share trade on the NYSE, Amex and Nasdaq, slightly above the
20-day moving average.
Also weighing on sentiment, the government
reported U.S. retail sales fell in May to their worst level in two years, the
latest data to point to sluggish U.S. growth after a weaker-than-expected U.S.
jobs report in May sparked widespread fears of a slowdown. The S&P Retail
Index <.RLX> lost 1.5 percent.
Shares of JPMorgan Chase & Co
<JPM.N> were a standout, rising 1.6 percent as the bank's chief
executive, Jamie Dimon, defended the portfolio behind JPMorgan's recent
multibillion-dollar trading loss, telling lawmakers it was a genuine hedge that
would make the firm a lot of money if a credit crisis hit.
In the overall market, the Dow Jones
industrial average <.DJI> fell 77.42 points, or 0.62 percent, at
12,496.38. The Standard & Poor's 500 Index <.SPX> lost 9.30 points,
or 0.70 percent, at 1,314.88. The Nasdaq Composite Index <.IXIC> dropped
24.46 points, or 0.86 percent, at 2,818.61.
Gold
rises for 4th day, eyes technical resistance
Gold rose for a fourth straight session on
Wednesday on safe-haven bids due to uncertainties in Europe ahead of a key
election in Greece, but the metal's repeated failures to break above major
chart resistance could trigger technical selling.
Bullion raced toward $1,625 an ounce
earlier in the session after weak U.S. retail sales and wholesale prices data
raised the prospect of additional monetary easing from the Federal Reserve.
Concerns about Spanish and Italian debt and jitters over Sunday's Greek
election also kept gold prices supported.
The metal, which has largely moved in sync
with risky assets so far this year, later pared gains even though the euro
stayed higher. Gold has also repeatedly failed to break above $1,640 for over a
month despite several recent rallies.
Spot gold <XAU=> was up 0.5 percent
at $1,617.70 an ounce by 2:39 p.m. EDT (1839 GMT), having earlier hit a high of
$1,624.36.
U.S. COMEX gold futures <GCQ2> for
August delivery settled up $5.60 at $1,619.40 an ounce, with trading volume
about 40 percent below its 30-day average, preliminary Reuters data showed.
U.S.
crude ends lower ahead of OPEC meeting
U.S. crude futures fell on Wednesday ahead
of an OPEC policy meeting expected to leave the group's production target unchanged,
while weak economic data added to the bearish sentiment.
Saudi Arabia came under pressure from
fellow OPEC producers to cut oil output to prevent a further slide in crude
prices a day ahead of the group's Thursday policy meeting in Vienna.
After Saudi Arabia initially floated a
proposal to lift OPEC's output target, Riyadh quickly dropped the idea and the 12-member
producer group looks set to leave its production ceiling unchanged at 30
million barrels per day.
U.S. data showed retail sales fell for a
second straight month in May and wholesale prices dropped the most in three years.
The reports were expected to boost chances of further action by the Federal
Reserve to shore up the flagging recovery.
On the New York Mercantile Exchange, July
crude <CLN2> fell 70 cents, or 0.84 percent, to $82.62 a barrel, having
traded from $82.15 to $84.01.
Nikkei
seen trapped in range, investors eye events on horizon
Japan's Nikkei share average is set to
tread in a tight range on Thursday after U.S. stocks stumbled on disappointing
retail data and investors remain wary ahead of a Greek election that could
alter the fate of the euro zone.
Investors are also looking towards a
two-day Bank of Japan policy meeting that concludes on Friday to see whether
the bank expands its easing programme, but many believe the BOJ will hold fire
ahead of a Federal Reserve policy meeting next week.
Nikkei futures in Chicago <0#NIY:>
closed at 8,530, down 0.7 percent from the close in Osaka <JNIc1> of
8,590 as U.S. stocks slipped after U.S. retail sales fell to a two-year low in
May, the latest indicator of an economic slowdown in the world's biggest
economy.
The Nikkei was driven 0.6 percent higher on
Wednesday to 8,587.84 by gains in a few large cap stocks with little overseas exposure
as investors played it safe and cut back on
euro-related stocks.
Euro zone finance ministers agreed to loan
Spain 100 billion euros at the weekend to shore up its troubled banks, which briefly
cheered global markets before doubts about the details
of the bailout set in.
Seoul
shares seen lower on U.S. data, Greek jitters
Seoul shares are poised to openlower on
Thursday, with investors unsettled by more signs of a slowdown in the U.S.
economy and ahead of this weekend's Greek elections that could decide its fate
in the euro zone.
U.S. retail sales fell for a second
straight month in May and wholesale prices dropped by the most in three years,
raising chances of further action by the Federal Reserve to shore up the
flagging recovery.
The Korea Composite Stock Price Index
(KOSPI) <.KS11> rose 0.25 percent to close at 1,859.32 points on
Wednesday. Thursday is quadruple witching day in Seoul, with stock options and
futures as well as index options and future all set to expire, but analysts see
only a limited impact as the market has been handling an extended run of
settlements since April.
HK
stocks seen drifting lower, Esprit to resume trade
Hong Kong shares are poised to start weaker
on Thursday after weak U.S. retail sales data added to concerns over the global
economy, giving risk-averse investors little reason to make big bets. Trade in
Esprit Holdings Ltd <0330.HK> will resume after the shares were suspended
on Wednesday afternoon.
The Hang Seng index <.HSI> closed up
0.8 percent on Wednesday in light trading, largely on the back of gains in
Chinese insurers. The China Enterprises index <.HSCE> of top locally
listed mainland firms closed up 1.5 percent.
Elsewhere in Asia, Japan's Nikkei
<.N225> was down 0.7 percent and South Korea's KOSPI <.KS11> had
lost 0.1 percent as of 0045 GMT.
Source : Reuters
