China, Greek debt worries hit shares

Concerns over a slowing Chinese economy and risks surrounding the huge Greek debt deal sent the euro and commodity-linked currencies lower today and saw European stocks open down.

China's premier Wen Jiabao, speaking at the country's annual parliamentary session, cut the nation's growth target to 7.5 per cent for 2012 to give the giant economy more room to slow down if needed.

"Slower Chinese growth means a negative impact on the world and commodity markets. In the short-term, this is probably a negative for risky assets," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

The FTSE Eurofirst index of top European shares opened down 0.3 per cent, giving back some of the gains made last week after the European Central Bank boosted liquidity in the banking system, easing fears over the region's debt crises.

The euro was down 0.1 per cent at $1.3190 while the dollar index measured against a basket of major currencies was at 79.46, near a two-week high of 79.50.

Copper, which has risen nearly 13 per cent this year, edged down 0.3 per cent to around $8,552 a tonne, but worries over Iran and Middle East supplies underpinned oil prices, which were climbing back toward $124 dollars a barrel.

Debt markets were focused on a March 8th deadline for Greece to complete a bond exchange with private creditors, the failure of which, Austrian chancellor Werner Faymann warned at the weekend, could still put the country back on the brink of a messy default.