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Asian stocks sag, Greek worries continue to impact euro

Crude oil prices decline as Iran nuclear talks drag on

Reuters Tokyo

Asian stocks sagged on Wednesday, taking their lead from weaker US shares, while the dollar held to sizeable gains against a euro dogged by nerves over Greek debt negotiations.

Crude oil prices continued declining as negotiations between Iran and world powers over nuclear technology with potential supply implications dragged on beyond a deadline.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1%. Japan's Nikkei lost 0.3% and South Korean and Australian shares also dipped.

Wall Street took a hit overnight as energy and healthcare shares retreated. But highlighting the boon enjoyed by US equities on the back of stronger economic fundamentals, the S&P 500 and Nasdaq registered their ninth straight quarterly advance.

 

The dollar was steady, holding to sizeable gains against the yen and euro, just coming out of its worst quarter against the greenback.

The euro tumbled 11% last quarter as US and euro zone monetary policies diverged, with the Federal Reserve poised to hike interest rates while the European Central Bank threw itself into quantitative easing.

More recently uncertainty over the Greek debt situation has come to dog the common currency again.

Greece failed on Tuesday to reach an initial deal on reforms with its lenders, a precondition for financial help. Without a deal with the European Union and IMF, Athens faces the prospect of running out of money in a few weeks.

"The ECB's 18-month quantitative easing program only began in March and to this day, Greece is a ticking time bomb for the Eurozone," Kathy Lien, Managing Director of FX Strategy for BK Asset Management, said in a note.

"Even though a deal was reached with their creditors back in February, Greece could still be pushed out of the monetary union and this risk is weighing heavily on the currency."

The euro was little changed at $1.0742 >, having shed 0.9% overnight. The dollar was steady at 119.98 yen > after touching an 11-day high of 120.37 overnight.

In commodities, US crude oil was down 0.3% at $47.46 after losing 2.2% on Tuesday.

Six world powers and Iran negotiated past a March 31 deadline, struggling to conclude an accord on Tehran's nuclear programme.

The powers want Iran to accept restrictions on its nuclear programme in exchange for the removal of export sanctions. A deal would mean more crude from oil-rich Iran entering an already oversupplied market.

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First Published: Apr 01 2015 | 6:42 AM IST

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