European stock markets mostly eased yesterday and the euro ran out of steam as investors appeared unconvinced by news of another bailout for cash-strapped Greece and after sharp losses in Tokyo.
London’s benchmark FTSE 100 index of top shares scraped out a 0.14 per cent gain to 5,863.16 points, while in Frankfurt the DAX slid 0.35 per cent to 7,084.57 points and in Paris the CAC 40 fell 0.70 per cent to 3,863.40 points.
The European single currency briefly hit a one-month high of $1.4658 after Greece secured a deal on fresh EU-IMF rescue funds while disappointing employment data dashed optimism over the US economic recovery.
However, the shared eurozone unit later pulled back to $1.4619, down from $1.4637 late in New York on Friday.
The European Union, the International Monetary Fund and the European Central Bank said Friday they agreed to extend the next tranche of funds under Greece’s debt rescue accord package, most likely in July.
That eased worries over a possible breakdown of the €110 billion IMF-European Union bailout programme for Athens, with possibly huge collateral damage for the eurozone at large.
Athens can also expect a new bailout, set to amount to some €60 billion but its international backers will want greater control over a radical economic overhaul.
However, “...the markets do not seem too content with the result of Friday’s discussions between Greece and the IMF/EU as we are drifting a little lower,” said Capital Spreads analyst Simon Denham.
Elsewhere in Europe, Amsterdam ended off 0.31 per cent, Brussels dipped 0.44 per cent, Swiss stocks slid 0.58 per cent, Madrid dropped 1.24 per cent, Milan 1.37 fell per cent.
“In the absence of macroeconomic statistics and company results investors continued to digest the poor indicators released in the United States last week,” Renaud Murail, a broker at Barclays Bourse.
Jobs data released showed the US economy added a paltry 54,000 jobs in May and the unemployment rate climbed to 9.1 per cent, its highest point since December.
“The outlook for the US economy is highly uncertain,” said Southern Cross Equities executive director Charlie Aitken in Sydney.
Falling bank shares pulled US stock markets lower at the open on Monday after warnings of continuing risks in the sector and poor economic data that could put pressure their earnings.
Citigroup led the fall, losing 3.7 per cent, Bank of America fell 2.3 per cent, JPMorgan Chase 2.4 per cent; and Wells Fargo 2.6 per cent.
At 1600 GMT the Dow Jones Industrial Average was down 0.14 per cent to 12,133.66 points.
The tech-focused Nasdaq 0.13 per cent to 2,729.11 points, while the broad-based S&P 500 lost 0.35 per cent to 1,295.59 points.
“Global economic uncertainty, courtesy of signs of slowing activity, exacerbated by Friday’s dismal US labour report, has hampered sentiment recently,” Charles Schwab analysts said.
Asian shares dropped on Monday as Tokyo was pulled lower by a plunging Tepco and after dismal jobs figures in the US pointed to a faltering recovery in the world’s largest economy.
The embattled utility was the biggest loser on the Nikkei after reports that it was to record a massive loss following the meltdown at its Fukushima nuclear power plant.
Trading around the region was thin, with five markets closed for public holidays, including Shanghai, Hong Kong and Seoul.