LONDON -- Financial markets focused their concerns on the future of Greece on Tuesday as the country's creditors have still not agreed on giving it the next installment of its rescue loans.
Greece's fellow euro partners gave it a couple more years to meet its economic targets but remain at odds with the International Monetary Fund over how to make the country's debt manageable over the longer-term. They need to agree on that before they can release the (euro) 31.5 billion ($40 billion). They will meet again on Nov. 20 to discuss that.
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The delay and seeming disagreements among the international creditors worried investors.
"As long as the situation in Greece remains unresolved, we can expect the markets to continue heading in the same direction," said Craig Erlam, market analyst at Alpari.
In Europe, Germany's DAX was down 0.9 percent at 7,106 while the CAC-40 in France fell 0.9 percent to 3,380. The FTSE 100 index of leading British shares was 0.8 percent lower at 5,721.
The euro also continued its downward drift, trading 0.3 percent lower at $1.2677.
Though Greece's creditors agreed at a meeting on Monday to give the country two additional years -- until 2016 -- to make fundamental changes to its economy, investors are worried about disagreements on where Greece's debt burden should be by the end of this decade.
IMF managing director Christine Lagarde said Greece should still be aiming to bring its debt burden down to 120 percent of its economy by the original target of 2020. But Jean-Claude Juncker, who chairs the meetings of the eurozone finance ministers, said that the deadline would likely be changed to 2022.
"Unless Greece enjoys an economic miracle or its creditors are prepared to incur losses then it doesn't really matter if you say 2020, 2022 or 2025, the most likely outcome is that Greece won't get anywhere near that target," said Gary Jenkins, managing director of Swordfish Research.
Wall Street was headed for a lower opening too, with Dow futures and the broader S&P 500 futures down 0.8 percent. Traders in the U.S. will continue to monitor developments over the approaching "fiscal cliff," which refers to government spending cuts and tax increases that are scheduled to kick in at the beginning of the new year, unless a divided Congress and the White House can work out a compromise before then.
Earlier in Asia, Japan's Nikkei 225 index fell 0.2 percent to close at 8,661.05. Hong Kong's Hang Seng lost 1.1 percent at 21,188.65. South Korea's Kospi dropped 0.6 percent to 1,889.70.
Mainland Chinese stocks fell after Housing Minister Jiang Weixin said Monday during the Communist Party congress that curbs placed on the property industry will not be relaxed in the near future.
The Shanghai Composite Index lost 1.5 percent to 2,047.89, while the Shenzhen Composite Index dropped 2 percent to 816.15. Shares in real estate weakened.
Oil prices dipped alongside equities with benchmark oil for December delivery down 77 cents to $84.80 per barrel in electronic trading on the New York Mercantile Exchange.