LONDON – LONDON (AP) — European stocks steadied Thursday despite a plunge in Asian markets as investors worried that Greece's debt crisis could spread to other countries but hoped that the European Central Bank could offer some guidance and support later in the day.
Britain's FTSE 100 was flat at 5,434.31 while Germany's DAX was up 0.3 percent at 5,977.82. France's CAC-40 was up 0.6 percent at 3,657.09.
Asian markets fell heavily, with Japan's index down 3.3 percent, and Wall Street was expected to lack direction on the open — Dow futures were flat at 10,830 and Standard & Poor's 500 futures were unchanged at 1,163.
With protests in Athens against new austerity measures culminating Wednesday in the death of three people, markets are worried that Greece could fall out of control or that its fiscal problems could affect other weak countries such as Portugal and Spain.
Hopes are now pinned on Greek lawmakers, who are expected to pass the new spending cuts as early as today, as well as the ECB, which may announce new support measures for the market.
After Thursday keeping interest rates at the record low of 1 percent and last week lowering requirements for Greek debt to be used as collateral for ECB loans, the bank may take more aggressive steps to help. Some analysts suggest President Jean-Claude Trichet may announce later at the press conference an alternative measure, such as bond purchases to support markets and keep borrowing costs down.
"We would not rule out such a move in future — any port in storm, after all," said Jennifer McKeown, senior European economist at Capital Economics in London.
Last weekend, Greece's 15 partners in the eurozone and the International Monetary Fund agreed to give the country euro110 billion ($141 billion) to avoid an imminent, disastrous default. That is expected to be cleared by governments, but is increasingly seen to be a short-term fix to a long-term solvency problem.
Given the amount of civil unrest in Greece, many fear the government there will be unable to pull off the size of austerity cuts it has planned. Because such uncertainties linger in the markets, the ECB is under pressure to deliver some sort of extra support.
"It should regain its leadership in tackling the crisis following a complete communication and coordination failure among euro area fiscal authorities around the Greek crisis," said Jacques Cailloux, chief eurozone economist at Royal Bank of Scotland.
Against this backdrop, the euro continued to weaken, falling as far as $1.2716 in trading Thursday — lows last seen in early 2009 and well below the $1.2827 it bought the day before in New York trading.
In Asia, Japan's Nikkei 225 stock average dived 3.3 percent to 10,695.69 for its biggest one-day fall in over a year while China's Shanghai benchmark sank 4.1 percent. Japanese markets were closed Monday through Wednesday for holidays.
South Korea's Kospi dropped 2 percent to 1,684.71, Hong Kong's Hang Seng retreated 1 percent to 20,133.41, Australia's benchmark lost 2.2 percent and Indonesia sank 2 percent in a regionwide rout. Benchmarks in Singapore, Taiwan, India, Malaysia and Thailand also slid.
The weaker euro hurt Japanese companies who do significant business in Europe. Canon Inc. was down 3.3 percent, and rival camera maker Nikon Corp. fell 3.1 percent.
Financial issues declined across Asia, with Japan's Sumitomo Mitsui Financial Group Inc. down 4.3 percent and South Korea's KB Financial Group Inc. tumbling 4.6 percent.
Oil prices extended losses from the day before. Benchmark crude for June delivery fell 44 cents to $79.53 in electronic trading on the New York Mercantile Exchange. The contract lost $2.77 to settle at $79.97 a barrel on Wednesday.
Associated Press writer Alex Kennedy contributed from Singapore.