Markets drop back with Asia closed for holidays

Global stock markets steady as several countries in Asia closed for holidays

Associated Press
Japan's Nikkei jumps on weaker yen
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FILE - In this Feb. 8, 2013 file photo. Trader Peter Costa, left, works on the floor of the New York Stock Exchange, in New York. Stock markets in Hong Kong, mainland China and Seoul were among those closed Monday, Feb. 11, 2013, for the Lunar New Year holiday. Japanese markets were also shut for a public holiday. European stocks were mostly higher in early trading, while Wall Street futures signaled gains ahead of the opening bell. (AP Photo/Richard Drew, File)

LONDON (AP) -- Global stocks dropped back Monday as major Asian markets remained closed for the Lunar New Year and other national holidays.

In Europe, investors were relieved that European Union leaders on Friday approved a new 7-year budget. Negotiations on the €1 trillion ($1.3 trillion) spending plan were tough and threatened to be delayed by a year, renewing uncertainty over the group's ability to come together to solve its financial problems. But a compromise was eventually found on the second day of their second summit on the matter.

A mild drop on Wall Street took the shine off European indexes, with Germany's DAX closing 0.2 percent lower at 7,633 and France's CAC-40 was barely changed on the day, up 0.03 percent to 3,650.

Britain's FTSE 100 rose 0.21 percent to 6,272.81 despite a survey showing business confidence hit a 21-year low. The BDO Optimism Index fell in January to the lowest level since it began and suggested the economy is contracting. Despite the pessimism, however, the survey suggested things would get better — hiring intentions for the next half-year rose.

Wall Street slipped at the opening bell, with the Dow 0.16 percent lower at 13,968 and the broader S&P 500 down 0.09 percent at 1,516.

Later in the day, investors will keep an eye on the meeting of finance ministers from the 17 EU countries that use the euro in Brussels. The ministers have still to approve the details of a bailout plan for Cyprus. That will likely hinge on how they will deal with the country's banks, whose bad loans would be too large for the Cypriot government to take on.

Analysts warn that the movements of the euro could shift moods in markets in Europe in the coming days after European Central Bank President Mario Draghi noted that an excessive appreciation would affect its future monetary policy.

"We expect the market to become more cautious in chasing the single currency higher. This is especially true as any further euro appreciation would now have a direct impact on investors' ECB rate expectations," said Adam Myers, analyst at Credit Agricole CIB.

After falling sharply last week, the euro was up 4 cents at $1.340.

In Asia, markets were closed in Hong Kong, mainland China, Seoul, Singapore, Taiwan and Vietnam for the Lunar New Year holiday, while Japanese markets were shut for a national holiday.

Of the markets that were open, Australia's S&P/ASX 200 closed 0.2 percent lower at 4,959.50. Key stock indexes in Thailand and New Zealand also fell.

Benchmark oil for March delivery rose 69 cents to $96.41 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 11 cents on the Nymex on Friday to close at $95.72 a barrel.

In currencies, the dollar rose 0.8 percent against the yen to 93.27 yen.

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