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Global shares dip on US fiscal cliff

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TOKYO – World shares edged down for a fourth day yesterday as concerns about a potential United States fiscal crisis and Greece’s bailout dented optimism over global growth.

Report by Reuters

Adding to the uncertainty, Japan reported that its economy shrank 0,9% in July-September from the previous quarter, pointing to a mild recession in the world’s third-largest economy.

“Investors remain consumed by US fiscal cliff consequences and this is capping market enthusiasm,” said Tim Waterer, senior trader at CMC Markets.

Since the US elections, the investors have worried that the return of the status quo in Washington will make it difficult for lawmakers to reach the compromises needed to avoid a “fiscal cliff” at the end of the year when nearly $600 billion worth of spending cuts and tax increases kick in.

The MSCI world equity index .MIWD00000PUS, which was down 0,1% at 322,80 points yesterday, has lost about 2% since President Barack Obama’s re-election and the Republican Party retained its majority in the House of Representatives.

European shares were little changed.

Export data out of China suggesting that seven straight quarters of slowing growth may have ended provided some support however, the positive data was offset by weak bank loan figures.

The FTSEurofirst 300 index .FTEU3 of top European shares was steady at 1,096.85 points, having dropped 1,6% last week. London’s FTSE 100 .FTSE, Paris’s CAC-40 .FCHI and Frankfurt’s DAX .GDAXI traded between 0,2% up and 0,1% lower LEU
US stock index futures pointed to a similarly mixed open on Wall Street, with futures for the S&P 500 up 0,15%, Dow Jones futures up 0,03% and Nasdaq 100 futures down 0,1%.

Greece stalls
A green light for the Greek government’s 2013 Budget from the parliament in Athens on Sunday had little impact on the euro, which hovered at $1,2705 to the dollar and is not far from the two-month low of $1,2690 hit on Friday.

The budget vote and another on an austerity package last week were conditions for unlocking the next tranche of aid from Greece’s international bailout.

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