Global Markets: Euro on back foot

European shares and the euro followed a broad range of riskier assets lower on Monday, as investors refocused attention from central bank stimulus schemes to weak economic fundamentals and the euro zone's still unresolved debt crisis.

The euro zone's troubles remain the focus for markets this week with Spain, under pressure to submit to a rescue programme, due to present its 2013 budget on Thursday and talks due to restart between Greece and the EU/IMF/ECB troika.

The FTSEurofirst 300, which was flat last week after having notched a near 18 percent rise since June, was 0.4 percent lower by 0900 GMT after Asian stocks had finished the day down by the same amount.

London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX were off between 0.3 and 0.7 percent and U.S. futures pointed to lower open on Wall Street as most major indices started the new week in negative territory.

The sideways market is set to continue most likely until we get more information from the Spanish issue, Ishaq Siddiqi, a strategist at ETX Capital, said, citing structural reforms expected out of Madrid on Thursday.

The liquidity rally looks like it's over and global growth worries are back on the agenda.

Germany's closely watched Ifo business survey added to the market gloom, suffering an unexpected fall and underlining the heavy impact the euro zone's travails are having on even the bloc's strongest economies.

The news pushed an already-falling euro to a new two-week low versus sterling and to a session low of $1.2923 against the dollar, putting it within touching distance of last week's low.

September's fall in the German Ifo business survey is a reminder that even the euro zone's strongest economies are suffering from a serious economic downturn, said Jennifer Mckeown at Capital Economics.

... contd.

ALSO READ

Special trading: NSE Nifty hits 28 months high

BSE Sensex closes 40 points up in special trading

BSE rejigs mid-cap, small-cap indices

Positive IIP data lifts BSE Sensex above 20k-level, NSE Nifty to 2013 high