Markets edge lower on Greek debt deal uncertainty
European markets edged lower this morning, echoing falls across Asia overnight, as investors showed caution over the outcome of the Greek debt swap deal.
London’s FTSE 100 edged down 0.53% to 5,7002 this morning, while the German Dax dropped 0.57% to 6,375 and the Cac 40 fell 0.67% to 3,296 soon after opening.
The euro also slipped 0.5495% against the dollar dropping to $1.3148.
Investors are nervously awaiting the outcome of the Greek debt swap deal, which will determine whether or not the troubled economy will be able to repay €15bn of its debt due in March.
Last night, Greek Prime Minister Lucas Papademos warned unless the country’s international backers agreed to a new bailout, Greece would be unable to pay off its loans and would be forced out of the eurozone.
The sell-off followed falls in Asia overnight. Japan’s Nikkei 225 fell 0.54% to 8,793, while Hong Kong’s Hang Seng index showed the strongest fall, dropping over 1% to 20,279.5.
All eyes are now on an EU meeting scheduled for Brussels tonight, where international leaders are set to discuss what to do if Greece fails to pass the austerity measures it must implement in exchange for additional bailout funds.
Germany has suggested a European commissioner should take control of Greek fiscal policy to ensure the austerity measures have passed, but the suggestion has faced fierce criticism from within Greece and outside for being undemocratic.
Meanwhile, commodities also fell after the US Federal Reserve’s pledge to keep interest rates low boosted riskier assets.
Brent Crude oil futures fell 0.7% to $111.53 per barrel, while the Forex Gold dropped 0.1% to $1,726 per ounce.
This article was first published on Investment Week