ECONOMY

Euro down on Greece fears, equities mixed ahead of break

The euro weakened Tuesday after the showdown debt talks between Greece and its creditors collapsed, raising the prospect the country will be dumped out of the eurozone.

However, many equity markets were unfazed by the trouble in Europe as trade begins to wind down in several Asian bourses before the Lunar New Year holiday at the end of the week.

Tokyo fell 0.10 percent, or 17.68 points, to 17,987.09 and Sydney lost 0.52 percent, or 30.5 points, to 5,858.2.

But Seoul gained 0.16 percent, or 3.22 points, to 1,961.45, while in late trade Hong Kong was 0.25 percent higher and Shanghai added 0.82 percent.

The closely watched meeting Monday broke down without agreement on Greece’s debt after Athens refused eurozone finance ministers’ demand that it apply for an extension to its bailout.

Eurogroup head Jeroen Dijsselbloem said the country had the rest of the week to make the request, with the 240 billion euro ($270 billion) lifeline expiring at the end of the month.

But an Athens source dismissed the demand to stick to its current bailout as «absurd».

Greeces new left-led government swept to power last month on a platform of overhauling the terms of the austerity-laden financial aid package, which it says has crippled the economy.

Finance Minister Yanis Varoufakis is looking for a six-month bridging loan to give Greece time and financial help to negotiate a new deal.

However the 18 other eurozone nations, led by Germany, say any changes must be within the current programme.

The breakdown hit the euro, which sank to $1.1358 and 134.45 yen from $1.1390 and 134.53 yen in London.

It is also sharply down from the $1.1421 and 135.43 yen levels earlier Monday in Tokyo.

“Greece and Germany came to the talks with different preconditions, and the lack of compromise is weighing on the euro,» Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo, told Bloomberg News.

The dollar bought 118.52 yen against 118.47 yen.

US markets were closed Monday for a public holiday.

Oil prices moved higher after key crude producer Kuwait signalled that the recent rise in prices would hold, while resurgent violence in Libya also provided support.

US benchmark West Texas Intermediate for March delivery rose 41 cents to $53.19, while Brent crude for April gained 69 cents to $62.09.

Gold fetched $1,228.53 an ounce, against $1,233.33 on Monday.

[AFP]