European shares flat as Spain, Greek worries weigh

Wednesday, 13 June 2012 00:04 - - {{hitsCtrl.values.hits}}

LONDON (Reuters): European shares and the euro were flat on Tuesday, with investors nervous over reports of official preparations for a Greek exit from the euro zone and after details of the Spanish bank bailout plan renewed worries about the region’s debt crisis.

Investors are worried that the weekend deal for Spain could further aggravate the nation’s rising public debt, as attention turns to problems in Italy and a The day-low level of the German share price index DAX is seen at Frankfurt’s stock exchange June 17 election in Greece that could determine the fate of the common currency bloc.

Most risk assets were stabilising after markets experienced a roller-coaster ride on Monday when optimism over Spain’s bailout gave way to the worries over its implementation.

The euro was little changed at $1.2504, below a high of $1.2672 hit on Monday, while Brent crude oil slipped below $98 a barrel, and gold edged down to $1,589.50 an ounce.

“The ‘risk on’ trade is over as investors look to the Greek elections and Italy,” said Jeff Sica, president of SICA Wealth Management.

MSCI’s world equity index was down 0.25 percent at 299.01 after ending 0.2 percent lower on Monday, while the FTSE Eurofirst 300 index of top European shares was up 0.1 percent at 984.25 points. The index had hit its highest since mid-May in the previous session.

Debt markets were little changed, with attention on an auction of relatively safe Austrian and Dutch bonds, which are expected to see good demand.