GLOBAL MARKETS-Debt worries keep euro under pressure; stocks dip

By Saikat Chatterjee

HONG KONG (Reuters) - The euro stayed under pressure and Asian stocks weakened in early trades on Monday on renewed worries over the global economy and concern that protracted wrangling in the euro zone could delay a solution to Greece's debt crisis.

Despite Asian stocks outside Japan > dipping to a 2-? month low, bargain-minded investors stayed on the sidelines due to a stream of bad news from the euro zone's festering debt crisis, the sputtering U.S. economy and signs of a slowdown in growth engines like China and India.

With the Federal Reserve's $600 billion bond purchase program set to expire by the end of June, investors have sought refuge in safe-haven assets like U.S. Treasuries even as the world's biggest economy lurched towards a technical default.

That kept the dollar near a one-week high against a basket of currencies and supported around 80 versus the yen, a day before a Bank of Japan meeting where it will consider expanding a loan program aimed at supporting certain industries, according to sources.

The euro bounced after falling by nearly 2 percent last week, its worst weekly performance since mid-May, though its gains appear short-lived, as disputes among policymakers cast a shadow on a meeting next week where euro zone leaders are due to finalise a new rescue package for Greece.

Asian stocks took a leaf out of the weaker finish on Wall Street with stocks in Japan and Seoul opening lower, though trading is expected to be subdued with holidays in Australia and before a slew of U.S. economic data this week.

Shares in Tokyo were trading 0.5 percent down respectively, hurt by weak machinery data for April in a sign that reconstruction-related demand has been slow to materialise.

The MSCI index of Asia Pacific shares outside Japan extended losses by 0.3 percent after falling for seven consecutive weeks. ? Continued...

Source: http://feeds.reuters.com/~r/reuters/AFRICAbusinessNews/~3/_PfSHElw-lY/idAFJOE75C03M20110613

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