Asian stocks, euro down as greek talks fall apart

GMT 03:31 2015 Monday ,15 June

Arab Today, arab today Asian stocks, euro down as greek talks fall apart

Asian stocks
Hong Kong - AFP

Asian stock markets and the euro sank Monday on fears Greece could tumble out of the eurozone after debt reform talks between Athens and its creditors collapsed, leaving the country on the verge of a default.

The losses also followed a sell-off in New York, where US investors were spooked after European officials confirmed that they had been preparing for a worst case scenario of Greece failing to pay its bills.

Tokyo fell 0.23 percent, Hong Kong shed 0.70 percent, Sydney lost 0.42 percent, Seoul was 0.17 percent lower and Shanghai was 0.14 percent down.

Negotiations between Greece and its creditors broke down in less than an hour on Sunday, with both sides blaming the other's refusal to back down on certain issues.

"They came with their hands in their pockets," a furious EU source close to the negotiations told AFP, while one Greek official described the creditors' demands as "irrational".

With Athens due to repay billions of euros in loans by the end of the month the latest failure raises the spectre of a default, which could ultimately lead to the country crashing out of the eurozone.

In forex markets the euro fell to $1.1220 and 138.57 yen in Tokyo early Monday from $1.1260 and 138.92 yen in New York.

However analysts said the single currency was unlikely to plunge as investors were in a wait-and-see mood.

The dollar fetched 123.51 yen against 123.37 on Friday.

In New York on Friday the Dow fell 0.78 percent, the S&P 500 lost 0.70 percent and the Nasdaq slipped 0.62 percent.

Adding to selling pressure in the US were expectations the Federal Reserve will hike interest rates before the end of the year.

A string of upbeat data out of Washington lately has shown the world's biggest economy is well on the road to recovery, giving the Fed the ammunition to hike rates from record lows as bank policymakers try to avoid a bubble appearing.

In Seoul, dealers are growing concerned about a Middle East Respiratory Syndrome (MERS) outbreak that has now killed 16 people and infected 150.

"If the MERS issue is prolonged and cuts consumption further, that’s a risk to South Korea’s growth outlook," said Kim Myoung Sil, a fixed-income analyst at KB Investment & Securities Co in Seoul.

On oil markets US benchmark West Texas Intermediate for delivery in July dropped 25 cents to $59.71 a barrel and Brent North Sea crude eased 47 cents to stand at $63.40.

Gold fetched $1,181.35 compared with $1,179.90 late Friday.

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