Asian Equities Lower as Greek Uncertainty Saps Confidence

Asian stocks and the euro fell on Thursday as markets erred on the side of caution over the ongoing Greek debt negotiations amid conflicting headlines on progress in the talks.  MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.7 percent as markets from Australia to China all declined. Japan’s Nikkei bucked the trend and gained 1.6 percent thanks to a significantly weaker yen.

CNBC reported late on Wednesday that an agreement in principle was in place between Greece and other euro zone governments, lifting risk appetite briefly. Luxembourg’s finance minister also said his euro zone counterparts agreed on a way forward to deal with Greece’s financing problems.  Still, the situation appears far from clear with Reuters reporting that there was no deal yet and a Greek government official insisting there could be no extension of the bailout.

“This Greek drama has been a huge overhang over the market. We’ve been held hostage and ignoring all sorts of other news, for example good economic news on the jobs front, earnings that have been more good than bad,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.  “Nobody was wanting to have a sloppy Greek exit disrupt the markets right now in what is a fragile European economy to begin with.”

Reuters

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