August 17, 2011 / 8:07 AM / 7 years ago

Stocks and euro slip on euro zone disappointment

LONDON (Reuters) - World stocks and the euro slipped on Wednesday as investors grew concerned that French and German plans for closer fiscal integration may be insufficient to stop the regional debt crisis from spreading further.

The Swiss franc surged against the euro after the Swiss National Bank said it would expand existing measures to counter the franc strength, but stopped short of announcing more drastic moves which some investors had expected.

France and Germany unveiled far-reaching plans for closer euro zone integration on Tuesday but stopped short of increasing the size of the region’s rescue fund and rejected for now the idea of a common euro bond.

Support for a common bond had been growing as it is increasingly seen as a way to allow highly indebted euro zone countries to regain access to commercial markets while providing investors a safeguard through joint liability.

“There weren’t any scoops as the proposals had been mentioned over the past few days. Overall, the outcome of the meeting wasn’t convincing, with no euro bond project,” said Patrice Perois, trader at Kepler Capital Markets, in Paris.

MSCI’s world equity index fell a quarter percent, having hit a 1/2 week high on Tuesday. The index hit an 11-month low earlier in August during a volatile week which saw a rush to safe-haven assets.

European stocks fell 1 percent while emerging stocks lost 0.2 percent.

U.S. crude oil rose 0.6 percent to $87.18 a barrel.

Bund futures rose 36 ticks.

The euro fell a quarter percent to $1.4367. The dollar rose 0.1 percent against a basket of major currencies.

Additional reporting by Blaise Robinson; Editing by Toby Chopra

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