Asian stocks sag, Greek worries continue to dog euro

Passers-by are reflected on a graph showing Japan's Nikkei index outside a brokerage in Tokyo on March 30, 2015. -- PHOTO: REUTERS
Passers-by are reflected on a graph showing Japan's Nikkei index outside a brokerage in Tokyo on March 30, 2015. -- PHOTO: REUTERS

TOKYO (Reuters) - Asian stocks sagged on Wednesday, taking their lead from weaker U.S. shares, while the dollar held to sizeable gains against a euro dogged by nerves over Greek debt negotiations.

Crude oil prices continued declining as negotiations between Iran and world powers over nuclear technology with potential supply implications dragged on beyond a deadline.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 per cent. Japan's Nikkei lost 0.3 per cent and South Korean and Australian shares also dipped.

Wall Street took a hit overnight as energy and healthcare shares retreated. But highlighting the boon enjoyed by U.S. equities on the back of stronger economic fundamentals, the S&P 500 and Nasdaq registered their ninth straight quarterly advance.

The U.S. dollar was steady, holding to sizeable gains against the yen and euro, just coming out of its worst quarter against the greenback.

The euro tumbled 11 per cent last quarter as U.S. and euro zone monetary policies diverged, with the Federal Reserve poised to hike interest rates while the European Central Bank threw itself into quantitative easing.

More recently uncertainty over the Greek debt situation has come to dog the common currency again.

Greece failed on Tuesday to reach an initial deal on reforms with its lenders, a precondition for financial help. Without a deal with the European Union and IMF, Athens faces the prospect of running out of money in a few weeks. "The ECB's 18-month quantitative easing program only began in March and to this day, Greece is a ticking time bomb for the Eurozone," Kathy Lien, Managing Director of FX Strategy for BK Asset Management, said in a note. "Even though a deal was reached with their creditors back in February, Greece could still be pushed out of the monetary union and this risk is weighing heavily on the currency."

The euro was little changed at US$1.0742, having shed 0.9 per cent overnight. The dollar was steady at 119.98 yen after touching an 11-day high of 120.37 overnight.

In commodities, U.S. crude oil was down 0.3 per cent at US$47.46 after losing 2.2 per cent on Tuesday.

Six world powers and Iran negotiated past a March 31 deadline, struggling to conclude an accord on Tehran's nuclear programme.

The powers want Iran to accept restrictions on its nuclear programme in exchange for the removal of export sanctions. A deal would mean more crude from oil-rich Iran entering an already oversupplied market.


Join ST's Telegram channel and get the latest breaking news delivered to you.