Markets steady as Cyprus banks reopen

An investor looks at the stock price monitor at a private securities company on Thursday, March 28, 2013, in Shanghai, China. Renewed jitters about the debt crisis in Europe sent Asian stock markets lower Thursday. (AP Photo/Eugene Hoshiko)
Eugene Hoshiko

LONDON Markets have steadied Thursday as Cyprus's banks reopened after a near two-week shutdown while the country negotiated a bailout agreement with international creditors that will see many large depositors lose a big chunk of their money.

At noon local time, the banks reopened and the mood was generally calm despite some long queues at certain branches. Cyprus has imposed capital controls to prevent a run on the banks, the first time such measures have been taken since the euro was established in 1999.

"Markets appear to have taken the news largely in their stride so far," said Fawad Razaqzada, market strategist at GFT Markets.

In Europe, the FTSE 100 index of leading British shares was up 0.3 percent at 6,405 while Germany's DAX rose the same rate to 7,810. The CAC-40 in France was 0.1 percent higher at 3,716.

The euro was also fairly steady, trading 0.1 percent higher at $1.2789.

It's been a volatile week for Europe's single currency following the Cyprus bailout agreement that was clinched in the early hours of Monday morning. Early relief gave way to concern that the Cyprus bailout agreement may be a model for the future.

Uncertainty over the political future of Italy is also putting pressure on the euro. Following inconclusive elections around a month ago, the country is still without a government, and that's raised concerns over the future economic path. Italy is the third-largest economy of the 17 countries that use the euro.

Wall Street was poised for an uninspiring session, with Dow futures flat and the broader S&P 500 futures down 0.1 percent.

A raft of U.S. economic due data later, including weekly jobless claims, may have a bearing on trading. But with Friday a public holiday in many parts of the world, investors have taken to the sidelines especially at the end of what has generally been a strong quarter -- particularly in the U.S.

"It has been a good quarter for equities, so money managers everywhere will be pretty happy to bank some profits before they tuck into their Easter eggs," said Will Hedden, sales trader at IG.

Earlier in Asia, trading was affected by worries over policy tightening in China, the world's second-largest economy. The Shanghai composite index ended 2.8 percent lower at 2,340.50, with banking stocks leading the retreat.

That had a knock-on effect elsewhere in the region. Japan's Nikkei 225 index tumbled 1.3 percent to 12,335.96 while Hong Kong's Hang Seng lost 0.7 percent to 22,299.63.

Like equities, oil prices were steady, with the benchmark New York rate up 6 cents to $96.64 per barrel.