GLOBAL MARKETS-Greek deal concerns cap shares, euro

Thu Feb 2, 2012 2:07pm GMT

* Euro dips on lack of progress in Greek talks

* U.S. shares seen opening flat after jobless claims

* Spanish debt auction fails to impress

By Richard Hubbard

LONDON, Feb 2 (Reuters) - The euro dipped but shares held onto recent gains on Thursday as investors weighed concerns about the absence of a deal to bail out Greece with optimism over signs of fragile economic growth.

U.S. stock index futures also pointed to a flat open on Wall Street, after weekly U.S. jobless claims data came in slightly lower than expected at 367,000 ahead of the key nonfarm payrolls report due Friday.

"It's not surprising to see a flat day today, considering the run we've had and that no-one is willing to take a bet before payrolls," said Rick Fier, vice president at Conifer Securities in New York.

The dollar was also barely changed after the claims data to be up 0.2 percent against a basket of currencies at 79.05.

Federal Reserve Chairman Ben Bernanke will give a testimony on the state of the U.S. economy later in the session and market players will watch for any signs the central bank may be edging closer to another round of quantitative easing.

WAITING FOR GREECE

But it was lack of progress on Greece that held much of the market back from following through on Wednesday's sharp rally which was driven by hopes the global economic outlook was not as bleak as had been feared.

The FTSEurofirst 300 index of top European shares, which closed at a high not seen since early August on Wednesday after positive manufacturing data from the U.S. and China, was barely changed at 1,058.67 points.

Gains in the MSCI world equity index had also stalled and it was up just 0.1 percent at 321.17, having risen over seven percent for the year to date.

Talks between Greece and its foreign lenders over an expected 130 billion euro ($171.5 billion) second bailout have rumbled on without a definite resolution, with a deal needed if the country is to meet bond redemptions due in March.

The euro fell to its day's low of $1.3089 when Eurogroup head Jean-Claude Juncker, said debt swap talks with Greece were very difficult and recent steps to address the euro zone debt crisis were insufficient.

Debt sales by Spain and France, which resulted in lower bond yields, also fuelled worries about waning demand for euro zone government debt.

Spain sold 4.56 billion euros of three-, four- and five-year government bonds while France also sold nearly 8.0 billion euros ($10.56 billion) of debt, including a new 10-year bond with lower average yields compared with the previous sales.

"A reasonable set of results but certainly not the humdinger of an outcome as seen at the last two sets of auctions," said Richard McGuire, rate strategist at Rabobank.

Brent crude oil inched higher on Thursday, but retreated from early gains, as a large build-up of oil stocks in top consumer the United States countered upbeat economic data globally.

But U.S. crude, also known as WTI, fell to its lowest in six weeks on inventory data and expectations of plentiful flows into a key U.S. refining hub.

U.S. gold and copper futures both fell as a rise in the dollar prompted metal investors to lock in recent profits ahead of the closely watched nonfarm payrolls report.

($1 = 0.7577 euros) (Additional reporting Nia Williams in London and Ryan Vlastelica in New York; editing by Anna Willard)

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Comments (1)
Trader_101x wrote:
The Greek deal still looms on the horizon, so I would expect a banking of profits and a consolidation before the deadline, and then a reaction to whatever is decided. I will believe in the deal, which has become something of a Greek myth, when I see it for myself.

Feb 02, 2012 3:54pm GMT  --  Report as abuse
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