NEW YORK (Reuters) - Stock indexes worldwide slipped on Monday on fears of Greece leaving the euro zone and concerns over conflict in Ukraine, while oil prices surged after an optimistic demand forecast from OPEC.
Wall Street and European shares slumped a day after Greek Prime Minister Alexis Tsipras ruled out extending the country’s bailout and said he would reverse some of the reforms imposed by its lenders, raising fears of a Greek exit from the euro zone.
Tensions rose further on Monday after European Commission President Jean-Claude Juncker said Greeks should not expect the euro zone to accept the latest terms proposed by Greece. Greek banking shares tumbled .FTATBNK nearly 10 percent.
“Greece can’t spend more money, back-track on labour market reforms and stay in the euro,” said Michael Jones, chief investment officer at RiverFront Investment Group in Richmond, Virginia.
Violence in Eastern Ukraine also weighed on shares. U.S. President Barack Obama said on Monday his administration is looking at all options in handling the crisis in Ukraine, but he has not yet decided whether the United States will provide lethal arms to Kiev.
In addition, data on Sunday showed China’s exports fell 3.3 percent in January from a year ago while imports tumbled 19.9 percent, raising concerns about the world’s second-largest economy.
Oil prices rose for a third straight session from near six-year lows as OPEC forecast greater demand for crude this year and projected less supply from countries outside the group. Brent crude LCOc1 hit $59.61 a barrel, its highest this year. [O/R]
The Japanese yen firmed against the U.S. dollar after two straight days of losses, largely on the concerns over Greece’s status and the conflict in Ukraine.
In Europe, the FTSEurofirst 300 index .FTEU3 of top regional shares ended 0.73 percent lower, at 1,480.01. MSCI's all-country world stock index .MIWD00000PUS fell 0.39 percent, to 418.86.
Safe-haven U.S. Treasury prices slipped, however, following strong U.S. jobs data released last Friday. Benchmark 10-year yields US10YT=RR, which move inversely to prices, were last at their highest in nearly a month at 1.98 percent.
“The fall in yields since the beginning of the year was a bit too extreme for the current state of our economy,” said Justin Hoogendoorn, fixed income strategist at BMO Capital Markets in Chicago.
The dollar was last down 0.43 percent against the yen at 118.630 yen JPY=EBS. The dollar index .DXY, which tracks the greenback versus a basket of six currencies, was down 0.13 percent, at 94.571.
Brent crude settled up 54 cents at $58.34 a barrel. U.S. crude CLc1 settled up $1.17 at $52.86.
The weakness in European equities helped gold recover from a three-week low hit Friday. Gold futures GCcv1 were last up 0.33 percent, at $1,238.7 an ounce.
Reporting by Sam Forgione; Additional reporting by John Geddie in London, Blaise Robinson in Paris and Chuck Mikolajczak and Gertrude Chavez-Dreyfuss in New York; Editing by Nick Zieminski and James Dalgleish