PARIS — Stocks fell modestly in Europe on Tuesday, after a rally in Asia, as the European Central Bank’s departing chief warned of an increasing risk of financial contagion from the euro zone debt crisis.
The broad European market was off less than 1 percent, and trading in index futures suggested Wall Street would start the day marginally weaker.
Jean-Claude Trichet, who is stepping aside from the top E.C.B. post to make way for Mario Draghi, told the European Parliament in Brussels on Tuesday that the financial crisis “has reached a systemic dimension,” Bloomberg News reported.
“Sovereign stress has moved from smaller economies to some of the larger countries,” Mr. Trichet said. “The crisis is systemic and must be tackled decisively.”
Mr. Trichet was speaking in his capacity as head of the European Systemic Risk Board, a body created last year to ensure supervision of the E.U. financial system. He steps down as E.C.B. chief on Nov. 1.
Investors were awaiting the outcome of a vote in Bratislava, where Slovakian lawmakers were scheduled to hold a debate later Tuesday on whether to back the European Financial Stability Facility. The Slovak government is divided on the bailout mechanism, and a failure of the vote could, at the very least, further complicate plans to shore up the euro zone.
On Monday, the European Council president, Herman Van Rompuy, said a European Union summit meeting on the debt crisis would be delayed by a week to Oct. 23 to give the bloc time “to finalize our comprehensive strategy on the euro area sovereign debt crisis covering a number of interrelated issues.”
Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France have promised a plan to recapitalize European banks before a Group of 20 summit meeting on Nov. 3.
“The sense of urgency among European officials that became apparent two weeks ago appears to be gathering steam,” analysts at DBS wrote in a note to clients. “One can’t be unhappy about that.”
In early trading, the Euro Stoxx 50 index, a barometer of euro zone blue chips, fell 0.5 percent, while the FTSE 100 index in London gave up 0.2 percent. Energy companies posted the largest declines as oil prices fell.
Standard Poor’s 500 index futures were down slightly, suggesting the U.S. market would be slightly weaker at the opening bell. The S. P. 500 powered 3.4 percent higher on Monday.
“The pressure on euro zone officials has ratcheted higher, and risks of failure are now too significant to jeopardize with half measures,” analysts at Crédit Agricole CIB said. “Weekend promises of banking sector capitalization by Germany and France have helped but will not be enough should such promises prove empty.”
Asian shares were higher across the board. The Tokyo benchmark Nikkei 225 stock average rose 2 percent. The Sydney market index S. P./ASX 200 rose 0.6 percent.
Chinese stocks initially rose a day after the country’s sovereign wealth fund bought shares in China’s four main banks in a show of support
, but the Shanghai composite index gave up all but 0.2 percent of the gain by the end of trading.
The Hang Seng index in Hong Kong also pared an early surge of more than 4 percent but ended the day up 2.4 percent.
The dollar was higher against other major currencies. The euro slipped to $1.3637 from $1.3642 late Monday in New York, while the British pound fell to $1.5646 from $1.5668. The dollar ticked up to 76.69 yen from 76.68 yen, and to 0.9043 Swiss francs from 0.9037 francs.
U.S. crude oil futures for November delivery fell 1.9 percent to $85.06 a barrel. Comex gold futures rose 2.1 percent to $1,670.80 an ounce.
Sei Chong reported from Hong Kong. Stephen Castle contributed reporting from Brussels.
Article source: http://feeds.nytimes.com/click.phdo?i=bfc0204b4572d738c61a2286993d184b
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