World stocks falter as Greece jitters offset China stimulus

AP News
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Posted: Feb 05, 2015 8:27 AM

TOKYO (AP) — Global stock markets faltered Thursday as the European standoff over Greece's international bailout intensified, tempering optimism from China's latest move to boost its economy.

KEEPING SCORE: In Europe, Germany's DAX lost 0.2 percent to 10,884 while Britain's FTSE 100 was down 0.2 percent at 6,844. France's CAC 40 shed 0.2 percent to 4,685. But futures pointed to gains on Wall Street, with Dow futures and the broader S&P 500 futures up 0.6 percent.

EUROPE PRESSURE: Greece's new left-wing government is insisting it will stick to its anti-austerity agenda, hours after the European Central Bank tightened the screws on Athens by withdrawing a key borrowing option for the country's banks. Late Wednesday, the ECB said it would stop allowing Greek banks to borrow from it cheaply using Greece's junk-rated government bonds as collateral, as prospects for a new deal with bailout creditors appear uncertain. Greece's new finance minister also failed to convince his skeptical German counterpart to back a new approach on Greece's debt as the two met for the first time since Syriza swept to power in Athens.

ANALYST TAKE: "The decision by the ECB to no longer accept Greek bonds as collateral may be aimed at piling the pressure on Greece to request an extension of its current bailout beyond February 28, but it is has also raised the risk that Greece could be forced into a default," said Jane Foley, an analyst at Rabobank International.

CHINA FACTOR: China's move to boost lending was a positive factor for markets. China late Wednesday cut the minimum level of reserves its banks are required to hold in a new move to reverse a deepening economic slowdown. The reduction will make more money available for lending and support small and rural enterprises, construction projects and other activity, the People's Bank of China said.

ASIA SCORECARD: The Nikkei 225, the benchmark for the Tokyo Stock Exchange, dipped 1 percent to 17,504.62. The Kospi in South Korea was down 0.5 percent to 1,952.84. But the Hang Seng in Hong Kong edged up 0.4 percent to 24,765.49. Southeast Asian benchmarks were mostly lower. Mainland Chinese shares also fell. Australia's S&P/ASX 200 added 0.5 percent to 5,811.

SOARING SONY: Sony shares jumped 12 percent in Tokyo after the Japanese electronics and entertainment company lowered its loss projection for the fiscal year late Wednesday, and said it expected the hack at its movie division to have minimal impact in the long run.

ENERGY: Benchmark U.S. crude was up $1.32 at $49.76 a barrel in electronic trading on the New York Mercantile Exchange. It plunged $4.60, or 8.7 percent, to settle at $48.45 a barrel in the previous trading session after the U.S. government reported an increase in crude inventories last week. Brent crude, a benchmark for international oils, was down 47 cents at $53.69 in London.

CURRENCIES: The euro rose 0.7 percent to $1.1416 while the dollar rose 0.2 percent to 117.50 yen.

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