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GLOBAL MARKETS-Stocks, euro fall on Greek wrangling

Published 06/15/2011, 09:56 AM
Updated 06/15/2011, 10:00 AM

* Euro weakens on euro zone discord over Greek aid

* World stocks retreat with European banks under pressure

* U.S., German government bonds rebound after sell-off

* Oil falls on stronger dollar, U.S. gasoline stocks (Updates market activity, changes dateline, previous London)

NEW YORK, June 15 (Reuters) - Stocks and the euro fell on Wednesday and safe-haven government bonds rose as divisions between euro zone officials over a new aid plan for debt-laden Greece curbed demand for risky assets.

In the United States, weaker-than-expected manufacturing data renewed worries over slowing growth, while figures that signaled the biggest rise in core consumer prices in nearly three years caused some to reconsider how long inflation pressure will remain tame in the absence of policy tightening from the Federal Reserve. For more details, see [ID:nN15281293]

Anxiety over the Greek debt crisis and disappointing U.S. data put downward pressure on global equity markets.

The MSCI world stock index <.MIWD00000PUS> was down 0.7 percent after posting its biggest single-day percentage rise on Tuesday due to less grim Chinese and U.S. economic data.

Wall Street opened 0.9 percent lower, while top European stocks <.FTEU3> fell 1.0 percent.

Tokyo's Nikkei <.N225> ended 0.3 percent lower following Tuesday's rally in New York.

Striking Greeks raged against a new wave of austerity after euro zone finance ministers failed to agree how to make private creditors contribute to a second bailout for their indebted country. This shifted the onus onto the leaders of Germany and France to forge a deal later this week.

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Selling pressure on the euro also increased after Moody's put BNP Paribas, Credit Agricole and Societe Generale on review for a possible downgrade, citing the French banks' holdings of Greek public and private debt.

The euro

Investor jitters rekindled a flight into low-risk U.S. and German government bonds.

Improved demand for bonds lowered benchmark 10-year Treasury yields

A stronger dollar fueled selling in oil and gold.

July Brent crude futures were down $1.85 at $118.31 a barrel, while the spot NYMEX oil contract was down 73 cents at $98.65.

Spot bullion prices

(Additional reporting by Emelia Sithole-Matarise, Jessica Mortimer, Naomi Tajitsu, Christopher Johnson and Amanda Cooper in London) (Writing by Richard Leong in New York; Editing by Theodore d'Afflisio)

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