Asian stocks edged lower and the euro sagged on Tuesday as insufficient progress on talks between debt-strapped Greece and its creditors kept investors on edge. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.1 percent. Japan’s Nikkei lost 0.3 percent and South Korea’s Kospi dipped 0.1 percent.
In a closely-watched Eurogroup meeting on Monday, euro zone finance ministers welcomed progress in negotiations between Greece and its creditors but said more work is needed for a cash-for-reform deal. “It acknowledged progress, but any further development will depend on a positive conclusion to a review of the current program. In other words, the story remains unchanged,” Richard Cochinos, head of Americas G10 FX strategy at Citi, wrote in a note to clients.
While Greece said on Monday it repaid about 750 million euros to the International Monetary Fund, the absence of a clear breakthrough in negotiations made it an anxious wait for markets worried that Athens would eventually run out of cash and default on its debts. “Barring an unforeseen shock, Greece should be able to carry on negotiations into June, but cash positions are low. Based on our expectations debts will have significant trouble being met beyond mid-June,” Cochinos at Citi said.