Reuters: US Dollar Report: GLOBAL MARKETS-Shares, euro dip on Cyprus concerns

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GLOBAL MARKETS-Shares, euro dip on Cyprus concerns Mar 19th 2013, 08:51 Tweet Share this Email Print Related Topics Stocks » Currencies » Markets » Cyclical Consumer Goods » Financials » Industrials » Tue Mar 19, 2013 4:51am EDT * European shares extend losses as Cyprus worries weigh * Euro falls back towards three-month low * German government bonds rise, periphery bonds dip By Marc Jones LONDON, March 19 (Reuters) - The euro and European shares fell for a second day on Tuesday as investors worried about the uncertainty over a bailout for Cyprus aimed at preventing a debt default and banking collapse. A government spokesman said Cyprus's parliament was likely to reject plans agreed by euro zone officials over the weekend to part-fund a 10 billion euro rescue of the island with a tax of between 6.75 and 9.9 percent on bank deposits. "All eyes will remain on Cyprus. Lots of uncertainty persists and most pressingly you don't seem to have a majority in the parliament even if you do a partial redesign of the deposit levy," said Tobias Blattner at Daiwa Securities. "Marketwise if you fail to pass the bill it would be catastrophic to a certain extent because, in theory, at that moment you would be looking at a default and you are just not sure what would happen then." Euro zone ministers have urged Cyprus to let smaller savers escape the levy but if its parliament, which is due to convene at 1600 GMT, cannot agree a deal it would put the bailout in jeopardy and raise the threat of default. The uncertainty saw the euro drop 0.2 percent as it remained near a three-month low and European shares fell 0.4 percent in early trades as they extended Monday's sell-off. Downbeat car data also weighed on sentiment as figures from Association of European Car Manufacturers showed sales fell more than 10 percent last month having hit a 17-year low in January. This year is shaping up to be another tough slog for manufactures across Europe, as consumers and firms in recessionary economies postpone big ticket purchases. London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX were down between 0.4 and 0.6 percent by 0815 GMT, while the concerns surrounding Cyprus meant German government bonds were again in demand as investors looked to traditional safe-haven assets. The Bund future was last up 25 ticks on the day at 144.18 while Italian and Spanish bonds fell for a second session. "We are just waiting for another headline out of Cyprus," one trader said, adding that buying Bunds "is the only trade to have on." "It's quite serious, it's got bigger implications. I think there is (a risk) of some cross border contamination," he added. Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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