* Fears of euro zone debt problems weigh on sentiment
* Stocks indexes track euro's weakness
* U.S. Treasuries firm, gold edges up on safe haven support
By Sanjeev Miglani
SINGAPORE, Nov 30 (Reuters) - The euro held near a
two-month low on Tuesday and major stock indexes edged lower
as fears that Ireland's fiscal problems could spread to more
euro zone countries weighed on investor sentiment.
An 85 billion euro rescue package for Dublin and a
permanent debt resolution system, agreed by euro zone
ministers at the weekend, were designed to stop a debt crisis
that has engulfed Greece and Ireland from moving on to
Portugal and, perhaps, Spain.
But it calmed few nerves in financial markets. The euro
slumped to $1.3065 on Monday, a low not seen since Sept
21, and yields on Italian and Spanish 10-year bonds jumped 20
basis points, the biggest daily rise in more than a decade.
The euro was little changed in Asian dealings, trading at
$1.3135 and U.S. Treasuries rose, adding to a rally on Monday,
as investors continued to seek out safe-haven investments.
Spot gold, another safe-haven favourite, was marginally higher.
"You probably have more selling to come through," said
Richard Grace, currency strategist at Commonwealth Bank,
referring to the euro. "Movements in European bond yields were
savage last night... and that's a reflection of the concern
that is evident in the market. I don't think this is over just
yet."
The single currency has fallen about 6 percent against the
dollar this month alone and is on track for its biggest
monthly fall since May, when it fell 7.5 percent.
Concerns about the euro zone's debt problems weighed on
major stock indexes. Japan's Nikkei share average
slipped 0.6 percent, coming off a five-month closing high on
Monday. Australian stocks dropped 0.5 percent, Seoul
shares opened 0.3 percent lower and Hong Kong's Hang
Seng fell 0.6 percent.
The correlation between the euro and stocks has become more
pronounced in recent weeks as the euro zone's debt problems
resurfaced, with traders selling the euro and stocks together.
However, the broader MSCI index for shares
outside of Japan rose 0.4 percent.
Spot gold was a touch higher at $1,367 an ounce, while oil
prices gave up some of their Monday gains to trade at $85.40
per barrel. NYMEX crude futures <CLc1> rose more than 2
percent on Monday off the back of a rally in heating fuel
after cold weather gripped Europe.
(Editing by Neil Fullick)
(Sanjeev Miglani@ThomsonReuters.com; Reuters Messaging
sanjeev.miglani.reuters.com@reuters.net; +65 6870 3815))
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