London: World stocks slipped and the euro wobbled yesterday on renewed investor worries over Greece's debt crisis and after a surprise interest rate hike by India last week stoked concern about riskier assets.
Pharmaceutical stocks were particularly in focus after the US House of Representatives gave final approval to a sweeping health care overhaul.
MSCI's all-country world stocks index was down around a third of a per cent, with the emerging markets sub-index down 0.8 per cent. The falls took this year's gains for emerging market stocks widely considered the best bet for returns by many investors — to barely even.
There was continued confusion about what kind of support Greece might need or get to help it sort out its debt crisis. Germany urged Athens to solve its problems alone while Italy backed European Union support.
At the same time, equity markets in Europe were being dragged lower by the pharma sector, now facing a new health care climate in the United States.
"You might find the pharmas are somewhat friendless out there at the moment," said Stephen Pope, chief global equity strategist at Cantor Fitzgerald in London.
The pan-European FTSEurofirst 300 was down 0.5 per cent. The STOXX Europe 600 health care index lost around 0.6 per cent.
India's stock market was down 0.7 per cent after the central bank's surprise 25-basis point rate hike on Friday, which came after local markets had closed.
Euro at three-week low
Japan's markets were closed Monday for a holiday.
The euro slumped to a three-week low against the dollar, pressured by uncertainty over whether Greece would be able to secure sufficient aid this week to deal with its deficit problems. "It seems there's agreement there will be some sort of assistance to Greece, but it's not clear what form that will take," said Carl Hammer, currency strategist at SEB in Stockholm, adding that this would keep the euro under selling pressure.
India's rate rise also helped prod the dollar to a two-week high against a currency basket by curbing risk appetite.
The euro was at $1.3523.
Yields on benchmark euro zone government debt were lower as equities slipped. But the premium investors demand to hold Greek government debt rather than euro zone benchmark Bunds rose to 338 basis points, its widest since March 1.
The cost of insuring Greek debt also rose to 337,500 euros per 10 million euros of exposure from 330,100 euros at Friday's New York close, according to prices from CMA DataVision.
