Greek political concerns weigh on stocks, euro

London - concerns that Europe's debt crisis may be worsening, particularly in Greece, keep markets stock check Wednesday while fresh Japanese economic figures, added to the evidence, which suggests that the global economic recovery is running of steam.

Stocks are able to recover a large part of the steep losses from Monday as the appetite of investors for risk remains low, taking into account a wide range of concerns. When investors are reluctant to take the risk, stocks always suffer.

The current struggle of Trac, which lasted about a month, have been based on two main factors - the world economy is hesitant and deepening of Europe's debt crisis.

The Greece continues to be the main driver of European debt concerns, even more after meetings Tuesday indicate the lack of consensus between the Government and the opposition. The EU stressed repeatedly that it is vital that politicians in Greece agree on the outline of a strategy of austerity beyond the end of the Government of the current mandate in 2013.

"Certainly the prospect of troubling political uncertainty financial markets is a real threat as the leader of the opposition, Antonis Samaras, stated that he will oppose any new fiscal austerity measures,"said Lee Hardman, analyst of the Bank of Tokyo-Mitsubishi UFJ."

Some analysts argue that Socialist Prime Minister George Papandreou the Greece could decide to call early elections to seek a mandate renewed for a strategy to deal with the mountain of debts.

Earlier this week, the Greek Government announced a raft of new tax measures, which included more euro6 billion in savings for this year, tax increases and is committed to immediately start previously announced privatization. It aims to reduce the budget deficit of 10.5% of the gross domestic product to 7.5 per cent last year to the end of 2011.

Progress on sale of property and get the levels of the country down the loan is crucial for the Greece if he wants to continue to obtain funding from the rescue plan.

While many investors think that the Greece will eventually have to restructure its debts under a certain form, they are also trying to assess whether other countries, such as the Italy or the Belgium, but in Spain, particularly will be dragged in the mire of debt.

"If the Spain is drawn in headlong in the peripheral crisis, the nature of the game change as long as this would signal that contagion is much closer to increasing its spread more away from the periphery, to the heart"said Jane Foley""Rabobank International analyst.

In these concerns, European stocks had difficulty recovering from losses Monday, when the debt concerns were particularly acute. DAX Germany was a couple of points lower to MDO while the CAC 40 in France fell an amount identical to 3,914. 00 FTSE index of leading British shares increased by 0.1 percent to 5,865.

The euro was likewise subdued, less exchange of 0.1% to $1.4074.

Wall Street was ready for a fairly subdued opening too - future Dow were down 0.1% in payments, whereas the 500 future the broader Standard & Poor fell at a rate similar to 1,313.

Earlier in Asia, Nikkei 225 lost Japan 0.6 per cent to 9,422.88 after government figures showed the country exports slid 12.5% in April - another indication of the devastating impact of the earthquake on March 11 and the tsunami. The index has lost 8.1% since the earthquake.

Bank of America, Merrill Lynch said the Japanese economy would be limited by the parties and shortages of power for two quarters more but begin to recover strongly from the last quarter of 2011.

Elsewhere, ABN Korea South sank 1.3% to 2,035.87 and S & P/ASX 200 lost Australia 1% to 4,584.70. Hong Kong Hang Seng rose from 0.1% to 22,747.28 but the shares of mainland China fell on expectations of a new policy of monetary tightening to counter inflation which could also slow economic growth.

The benchmark index Composite of Shanghai lost 0.9% to 2,741.74, the session losing fifth straight, and index Composite's Shenzhen lost 1.5% to 1,134.19.

The mild tone largely in stock markets down low oil prices - two assets moved in broadly similar directions for the last few months. Benchmark crude for July delivery declined 15 cents per barrel to $99.47 in electronic commerce on the New York Mercantile Exchange Wednesday.