Asian markets drift lower ahead of EU summit

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By KELVIN CHAN, Associated Press

HONG KONG (AP) — Asian stocks mostly drifted lower Monday as investors grew cautious ahead of a critical European Union summit later this week where Greek leaders will attempt to renegotiate some terms of the country's international bailout.

Japan's Nikkei 225 index was 0.1 percent lower at 8,785.10 and South Korea's Kospi slid 1.7 percent to 1,816.11. Hong Kong's Hang Seng was flat at 18,998.78 as it fluctuated between gains and losses. Australia's S&P/ASX 200 was down 1.2 percent at 3,999.40.

Mainland China's Shanghai Composite Index fell as did benchmarks in Singapore and Taiwan.

Investor pessimism about the state of the world economy prevailed even as the leaders of France, Germany, Italy and Spain agreed over the weekend to push for a growth package worth up to €130 billion ($163 billion) at the European Union summit scheduled for June 28-29 in Brussels. The meeting is aimed at kick-starting the economy and safeguarding the currency bloc.

The summit will prove a key test of Greek leaders' pledges to loosen the terms of the country's bailout. Greece's new government said on the weekend it would seek to repeal some taxes, halt layoffs and extend a deadline for tough austerity measures by two years. But Germany, the biggest single contributor to the bailout, says Athens must stick to the current targets.

Previous summits and meetings have failed to deliver a "credible set of solutions to the Eurozone crisis," strategists at Credit Agricole CIB said, so "markets are likely to remain relatively range bound ahead of the summit."

On Wall Street on Friday, stock markets bounced back. The Dow Jones industrial average gained 67.21 to close at 12,640.78. The Standard & Poor's 500 index 0.7 percent to 1,335.02 and the Nasdaq composite index climbed 1.1 percent to 2,892.42.

Benchmark crude was up 22 cents to $78.98 in electronic trading on the New York Mercantile Exchange. The contract settled at $79.76 a barrel on Friday.

In currencies, the euro slipped to $1.2533 to from $1.2561 in late trading Friday. The dollar fell to 80.28 Japanese yen from 80.45 yen.

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