Euro, Metals Fall on Greece Bailout Concern; Stocks Pare Gains

NEWYORK, March 24  -- The euro fell to a record low against the Swiss franc, metals declined and stocks in Asia pared gains on concern Greece will be forced to seek financial aid from the International Monetary Fund.

Europe's single currency weakened to a 10-month low versus the dollar after French and German leaders said any bailout package for Greece would require IMF help. Copper dropped as much as 0.5 percent, reversing an earlier gain. Futures on the U.S. Standard & Poor's 500 Index dropped 0.2 percent. The MSCI Asia Pacific Index was 0.2 percent higher at 3:20 p.m. in Tokyo.

Concern that the European Union will call for outside help to solve Greece's budget woes tempered confidence that the global economic recovery is gaining momentum. Japan's exports grew at the fastest pace in 30 years in February, Taiwan's industrial production jumped 35 percent, and an index of computer-memory prices climbed for a sixth day.

"Investors are slowly coming back into the market as the macroeconomic picture still looks bright," said Mark Konyn, chief executive officer of Hong Kong-based RCM Asia Pacific Ltd., which oversees $12 billion. "Concerns about inflation, monetary tightening and problems of sovereign debt in Europe will continue to cast a shadow on the market."

Hong Kong's Hang Seng Index was little changed after climbing as much as 1 percent, while Taiwan's Taiex Index was 0.1 percent higher after gaining 0.9 percent. The Nikkei 225 Stock Average rose 0.4 percent in Japan, and Australia's S&P/ASX 200 Index advanced 0.3 percent.

Greece Aid

The euro weakened against 13 of the 16 major currencies after a German Finance Ministry official told reporters in Berlin that Germany and France agreed to back an IMF role in any aid for Greece. The shift, made before start of a two-day EU summit in Brussels tomorrow, came a week after euro-area finance ministers had agreed to a European framework for a bailout.

"It looks like the eurozone can't resolve the Greek crisis by themselves so they are going to the IMF for help," said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. "This casts some doubt over the strength of the European Union. The bias is to sell the euro."

The euro fell as low as 1.4233 Swiss francs, before trading at 1.4234 as of 2:16 p.m. in Tokyo from 1.4275 in New York yesterday. The single currency dropped to $1.3456 from $1.3499, after earlier falling as low as $1.3407, the lowest level since May 8. It declined to 121.62 yen from 122.03 yen.

Three-month copper on the London Metal Exchange declined as much as 0.5 percent to $7,405.75, reversing early gains, as the dollar gained against 14 of its 16 major counterparts.

"Base metals were under pressure from the dollar's strength, especially against the euro," Hiroaki Hama, an analyst at Mizuho Corporate Bank Ltd. in Tokyo, said by phone.

Asian Recovery

Nickel futures declined as much as 1.1 percent to $22,250 a ton in London, and traded at $22,260 at 2:13 p.m. in Singapore. Tin fell as much as 0.3 percent to $17,555 a ton, while lead dropped as much as 0.7 percent to $2,090 a ton.

Mining stocks gained after the Valor Economico newspaper reported Brazil's Vale SA more than doubled rates on some types of iron ore. Rio Tinto Group, the world's third-biggest mining company, rose 2 percent in Sydney while BHP Billiton Ltd., the largest, climbed 0.7 percent.

Rio de Janeiro-based Vale, the world's largest iron-ore producer, is seeking shorter sales contracts with its steel mill customers that could boost prices 90 percent for the quarter starting next month, Credit Suisse Group AG said.

"Global demand is increasing, especially for cyclical sectors, as economies head toward a recovery," said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo. "There are growing expectations for corporate performance to recover next fiscal year."

Technology Stocks

Japan's overseas sales climbed 45.3 percent in February, quickening from a 40.8 percent increase in January. The gains were driven by Asia, especially China, the No. 1 destination for goods shipped from Japan, Taiwan and South Korea.

Taiwan's industrial production grew for a sixth month in February. Export orders, an indication of shipments in the next one to three months, rose for a fifth month, the government said yesterday.

Chipmakers led gains in Taiwan and South Korea after the benchmark dynamic random access memory, or DRAM, increased 3.2 percent to $2.94 yesterday, according to Dramexchange Technology Inc., operator of Asia's biggest spot market for semiconductors.

Samsung Electronics Co., the world's largest memory-chip maker, climbed 1.5 percent in Seoul. Hynix Semiconductor Inc., the world's second-biggest computer-memory chipmaker, rose 1.8 percent. Taiwan Semiconductor Manufacturing Co., the world's largest custom-chip maker, gained 1.5 percent.

Crude oil declined for the first time in three days as the dollar strengthened and an industry report showed a gain in U.S. crude oil stockpiles. Oil for May delivery fell 0.9 percent to $81.19 a barrel in electronic trading on the New York Mercantile Exchange.