Euro shares face worst week since November amid Cyprus crisis
European shares were heading for their worst week since November and safe-haven German government bonds were at 2013 highs today, as Cyprus scrambled to avoid a meltdown of its banking system and a possible exit from the euro.
The European Union has given Cyprus until Monday to raise the €5.8 billion needed to secure a €10bn international lifeline.
There was few signs of progress as European markets opened.
"I would sell on the rallies. With all this uncertainty over Cyprus, the markets will be going a touch lower again," said Berkeley Futures associate director Richard Griffiths.
Cypriot Finance Minister Michael Sarris was due to fly home from Moscow empty handed today after failing to win support in two days of crisis talks with Russia on prolonging a bailout loan or on a possible new financing package.
The Cypriot parliament will reconvene later today to debate a raft of government crisis measures.
The pan-European FTSEurofirst 300 opened 0.2pc lower, bringing its total losses for the week to over 1pc, its worst run since mid-November.
Asian shares had ended the week at 2013 lows and falls of 0.3pc on Germany's DAX and France's CAC and a 0.1pc dip on London's FTSE, left the MSCI world share index down 0.3pc.
Adding to the cautious mood, French business confidence showed no improvement in March, although the fact there was no further deterioration helped settle economists following Thursday's weaker-than-expected PMI figures.
With concerns over Cyprus' future dominating market attention, German government bonds where once again in demand.
The yield on German 10-year Bunds - which moves down as prices go up - fell to its lowest level of the year in early trading to 1.34pc, with some traders expecting further falls if the crisis on the Mediterranean island remains unresolved.
In the currency market, the euro, which has largely held its ground this week despite the turmoil in Cyprus, was again little changed as trading gathered pace at just above $1.29.
The dollar also held steady against a basket of major currencies while gold, favoured by tension-sensitive investors, held near a one-month high of $1,616.36 an ounce touched on Thursday.