GLOBAL MARKETS-Euro zone debt worries hit euro, stocks

* Euro hits four-month low against dollar

* World stocks weaker

* Wall Street set to open lower

By Jeremy Gaunt, European Investment Correspondent

LONDON, Jan 10 (BestGrowthStock) – Speculation that Portugal may be
the next euro zone member forced to seek a bailout knocked the
euro to a four-month low against the dollar on Monday and added
pressure on world stocks already hurt by lacklustre U.S. jobs
data.

Wall Street also looked set to open lower.

The euro fell (Read more about the trembling euro. ) to lows not seen since mid-September in Asia
trading, slipping to $1.2860 (EUR=: ) on trading platform EBS. It
later recovered to just below $1.2893.

The single currency’s drop was triggered by a Reuters report
on Sunday citing a senior euro zone source saying that pressure
was growing on Portugal from Germany and France to seek
financial help from the European Union and International
Monetary Fund to help prevent the bloc’s debt crisis from
spreading. [ID:nLDE7080FG]

Those comments came after a Portuguese government spokesman
denied a German magazine report that Lisbon was under pressure
from Berlin and Paris to seek a bailout. [ID:nLDE70808M]

Concern about euro zone debt has returned after a brief
hiatus with a series of auctions of Portuguese, Spanish and
Italian debt due in the coming week. [EURODEBT/O]

“I think overall the path of least resistance is going to be
the downside for the euro,” said Andrew Robinson, currency
market strategist for Saxo Capital Markets in Singapore.

Yields on peripheral euro zone bonds generally rose but
pressure eased as traders cited bond buying by the European
Central Bank. [ID:nLDE7090U2]

Portuguese debt yields were lower on the ECB sentiment.

“There is a lot of concern among politicians over the
crisis, and this only fuels the market’s concerns,” said Niels
From, chief analyst at Nordea in Copenhagen.

STOCKS WEAKER

Debt concerns weighed on global equity markets, where
investors were already digesting last Friday’s disappointing
U.S. payrolls report as well as preparing for the start of the
fourth-quarter earnings season.

World stocks as measured by MSCI (.MIWD00000PUS: ) lost half a
percent, taking them into negative territory for the
year-to-date. Emerging markets stocks (.MSCIEF: ) were down 1
percent.

In Europe, the FTSEurofirst 300 (.FTEU3: ) was down 0.7
percent. Japanese markets were closed for a holiday.

“The debt crisis is still a feature in the background. We
did see some disappointment as far as Portugal is concerned in
terms of the rates they are paying. Some other countries will
also be approaching the debt market in the near term,” said
Keith Bowman, equity analyst at Hargreaves Lansdown.

The quarterly results season kicks off in the United States
this week with Alcoa (AA.N: ), Intel (INTC.O: ) and JPMorgan Chase
(JPM.N: ) among the first to report.
(Additional reporting by William James and Atul Prakash;
Editing by Hugh Lawson)