Growth fears send shares lower again
European shares opened lower again today and the euro drifted toward two-week lows, hit by concerns over slowing economic growth in China and Europe and the risks of Greece failing to complete a debt deal restructuring deal.
China's lowering of its growth target and data pointing to Europe possibly slipping back into recession have eroded the optimism on global markets generated by the European Central Bank's provision of massive loans to banks since December.
"We've had the ECB bathe us in this warm glow of liquidity but politically there is a lot more to be done, and there is still a risk that tensions could rise again into the spring and summer," said Jane Foley, senior currency strategist at Rabobank.
The euro was down 0.2 per cent to $1.3195, in early European trading, inching closer to yesterday's two-week low of $1.3160.
Falls in Chinese shares after the government lowered its 2012 growth target to 7.5 per cent and weakness in Australian resource stocks helped send the MSCI world equity index down 0.5 per cent to 328.23.
The FTSE Eurofirst index of top European shares opened down 0.3 per cent.
The search for a safe haven saw German government bonds rise 30 ticks from the previous close to 140.13, after setting a record high of 140.39 during the day yesterday. Spanish and Italian 10-year bond yields were also rising.