* Euro weakens on fears Greece may forego next bailout
* Draghi stimulus comment, Italian election also weigh on
* European stocks expected to open flat to lower
* Asia ex-Japan shares slip after US, UK holidays; Nikkei
* Oil futures retreat as supply concerns linger
By Nichola Saminather
SINGAPORE, May 30 Concerns about situations
involving Greece, Italy and the European Central Bank kept the
euro under pressure on Tuesday.
European geopolitical fears sapped risk appetite, weighing
on Asian stocks and lifting safe havens including the yen and
gold, though trading was thin with several markets closed for
For Tuesday, European stock markets were set for a soft
start, with financial spreadbetter IG Markets expecting
Britain's FTSE and France's CAC 40 to open 0.15
percent and 0.3 percent lower, respectively, and Germany's DAX
to start the day flat.
The euro slid 0.45 percent to $1.1114 in its
fourth session of declines.
James Woods, global investment analyst at Rivkin Securities
in Sydney, attributed most of the currency's decline on Tuesday
to a German press report saying Athens may opt out of its next
bailout payment if creditors cannot strike a debt relief deal.
"The bailout payments are necessary to meet existing debt
repayments due in July, so if Greece were to forgo this bailout
payment the probability of a default would spike, reopening the
discussion around a Grexit from the Euro zone," Woods said.
However, he cautioned against reading "too much into it"
without more details or confirmation, adding it was unlikely
Greece would forgo the bailout payment at this stage.
Euro zone finance ministers failed to agree with the
International Monetary Fund on Greek debt relief or to release
new loans to Athens last week, but did come close enough to aim
to do both at their June meeting.
Comments by former Italian Prime Minister Matteo Renzi on
Sunday in favour of holding an election at the same time as
Germany's in September also raised uncertainty and pulled the
So did a statement by European Central Bank President Mario
Draghi reiterating the need for "substantial" stimulus given
MSCI's broadest index of Asia-Pacific shares outside Japan
fell 0.2 percent with U.S. and British markets
closed on Monday.
China, Hong Kong and Taiwan markets are closed for holidays
Japan's Nikkei ended flat, held back by a stronger
South Korea's KOSPI fell 0.4 percent as investors
took profits following the market's record-breaking rally this
North Korean leader Kim Jong Un supervised Monday's test of
a new ballistic missile controlled by a precision guidance
system and ordered the development of more powerful strategic
weapons, the North's official KCNA news agency reported on
South Korea said it had conducted a joint drill with a U.S.
supersonic B-1B Lancer bomber on Monday. North Korea's state
media earlier accused the U.S. of staging a drill to practise
dropping nuclear bombs on the Korean peninsula.
European blue-chip stocks fell 0.2 percent on
Monday, with Italy's banking index sliding 3.4 percent, its
biggest loss in nearly four months, after two lenders sought
help to cover a capital shortfall.
Sterling retreated 0.2 percent to $1.2809 after
British Prime Minister Theresa May's lead over the opposition
Labour Party dropped to 6 percentage points in the latest poll
to show a tightening race since the Manchester bombing and a
U-turn over social care plans.
The dollar declined 0.4 percent to 110.88 yen.
The dollar index, which tracks the greenback against
a basket of trade-weighted peers, however, advanced 0.3 percent
Markets are awaiting economic indicators including French
first quarter gross domestic product, German inflation data for
May, and U.S. inflation for April later in the session.
In commodities, oil prices retreated, as concerns lingered
about whether the extension of output cuts by OPEC and other
producing countries will be enough to support prices.
U.S. crude futures slipped about 0.1 percent to
$49.78 a barrel.
Global benchmark Brent fell 0.4 percent to $52.09.
Gold rose 0.1 percent to $1,268 an ounce.
(Reporting by Nichola Saminather; Editing by Kim Coghill and