World market losses ease, Cyprus talks continue

AP News
Posted: Mar 22, 2013 9:45 AM
World market losses ease, Cyprus talks continue

AMSTERDAM (AP) — World stock markets recovered from earlier losses as trading in the U.S. started, with investors monitoring Cypriot talks to get a bailout that can spare the country from financial ruin.

Separately, Japanese stocks tumbled after the country's new central bank chief, Haruhiko Kuroda, delivered his first speech since taking office. Kuroda reiterated a pledge to bring Asia's second biggest economy out of deflation but disappointed investors by offering few specifics.

In Europe, Cyprus was scrambling to agree on a plan for recapitalizing its banks and appeared to be returning to an altered form of a plan it rejected earlier this week: allowing depositors to take losses on accounts containing more than €100,000 at its second-largest and most stressed bank, Laiki.

Cyprus's banks have been closed for a week, and the European Central Bank has threatened to cut off an emergency program supporting them if a solution is not found by the end of Monday.

"The ECB has put an impressive literal gun at the head of Cyprus as banks would probably go bust without...(support) once they re-open their doors," said ING economist Carsten Brzeski in a note. "However, it is hard to imagine that the ECB would really be willing to be the one to pull the trigger which could eventually even lead to a Cypriot exit from the eurozone."

Britain's FTSE 100 turned positive and rose 0.3 percent to 6,406.26. Germany's DAX lost 0.1 percent to 7,927.49, and France's CAC-40 was also down just 0.1 percent to 3,771.82.

Wall Street opened higher, with the Dow rising 0.4 percent to 14,476.79 the broader S&P 500 index up by the same rate to 1,552.46.

Japan's benchmark Nikkei 225 dropped 2.4 percent to close at 12,338.53 after Kuroda's remarks.

Hong Kong's Hang Seng lost 0.5 percent to 22,115.30. South Korea's Kospi fell 0.1 percent at 1,948.71. Benchmarks in Singapore, Taiwan and Indonesia also fell.

Mainland Chinese shares gained for the fourth straight trading day, with the Shanghai Composite Index up 0.1 percent to 2,328.28 while the smaller Shenzhen Composite Index gained 0.3 percent to 960.84.

Australia's S&P ASX 200 rose 0.2 percent to 4,967.30.

Oil prices rose, with benchmark crude for May delivery up 20 cents to $92.61 a barrel in electronic trading on the New York.

The euro rose to $1.2946 from $1.2899 in late trading Thursday, while the dollar was steady against the yen at 94.89.


Associated Press Business Writer Kelvin Chan contributed to this story from Hong Hong.