European stock markets and the euro treaded water yesterday as EU ministers met over Greek debt.
Meanwhile oil prices fell yesterday as traders worried over the Greek debt crisis, weak global economic outlook and a looming “fiscal cliff” in the United States – which is the world’s biggest oil consumer.
Traders said the market also pushed lower after the International Energy Agency estimated that the US would experience a major rebound in its oil production over the next 10 years.
In early afternoon London deals, Brent North Sea crude for delivery in December fell 22 cents to $109.18 a barrel.
New York’s main contract, light sweet crude for December or West Texas Intermediate (WTI), shed nine cents to $85.98 a barrel.
London’s FTSE 100 index of top companies edged down a mere 0.04 per cent to 5,767.27 points, while in Frankfurt the DAX 30 ended up just 0.07 per cent to 7,168.76 points, and in Paris the CAC 40 slid 0.35 per cent lower to 3,411.65 points.
Going into the meeting, Jean-Claude Juncker, who heads the Eurogroup of finance ministers, said Greece has “delivered” on its economic reform pledges and a long-awaited report from its troika of creditors – the European Union, European Central Bank and International Monetary Fund – is “positive”.
But Germany said only part of the troika’s latest report was available, and a final decision was not immediately expected on a fresh aid tranche of €31.5 billion held back since June. Athens has said it needs the money by the end of the week or it faces defaulting on a bond repayment.
Ministers were also expected to discuss giving Greece an extra two years to meet its fiscal targets, and where to find the extra €32.6 billion this is expected to cost.
In foreign exchange activity, the euro edged up to $1.2716 from $1.2709 late in New York on Friday. Gold prices dipped to $1,735.25 an ounce from $1,738.25 on Friday.
US stocks opened with modest gains after last week’s slump, lifted by encouraging China trade data that signalled renewed momentum in the world’s second-biggest economy, but quickly lost steam.
In midday trade the Dow Jones Industrial Average was down 0.16 per cent to 12,794.85 points.
The broader S&P 500 Index dipped 0.12 per cent to 1,378.14 points and the tech-heavy Nasdaq dropped 0.22 per cent to 2,898.45 points.
Asian markets closed mixed earlier in the day as news that Japan’s economy shrank in the third quarter and fears over the US “fiscal cliff” offset another round of healthy Chinese data, traders said.
In the United States, rival politicians must reach a deal by January 1 to avoid the shock of $600 billion in automatic spending cuts and tax hikes which observers say would tip the country back into recession.
Meanwhile, indications that the Chinese economy is emerging from a drawn-out slumber were reinforced on Saturday when figures showed that exports rose 11.6 per cent year-on-year in October, following a near 10 per cent jump in September.