US Markets

The euro fell to a new six-week low against the dollar Thursday after French, German and Italian leaders agreed not to widen the role of the European Central Bank to support weaker euro-zone states. The European single currency sank as low as $1.3316, its lowest since Oct. 6. That compared with $1.3334 late in New York Wednesday. Euro-zone giants Germany and France vowed to propose changes to EU governing treaties Thursday, but Chancellor Angela Merkel stood by her refusal to widen the European Central Bank's role. France had urged Berlin to allow the ECB to become a lender of last resort, with the firepower to protect debt-ridden euro-zone members from falling victim to the bond markets, but the German leader stood firm at crisis talks. President Nicolas Sarkozy of France and Prime Minister Mario Monti of Italy stood by her side at a news conference in Strasbourg as she repeated her line. Sentiment was also hampered after the yield on Italian 10-year bonds, the broad cost of government borrowing, soared back above 7.0% Thursday. And in a fresh sign that all was not well among the euro zone's peripheral nations, Fitch cut its rating on bailed-out Portugal to junk-bond status at BB+, blaming its high level of debt and weak economic outlook. Foreign exchange markets are quiet with the U.S. off for Thanksgiving holiday. With liquidity at exceptionally thin levels, trading desks aren't looking to take on new positions Thursday, said Don Mikolich, director of foreign-exchange sales at CIBC World Markets.

European Markets

The losing run in European stocks extended for yet another day as comments from euro-zone leaders again signaled that there is no agreement on how to resolve the long-running debt crisis. Government bond yields rose after German Chancellor Angela Merkel poured cold water onto hopes that she was warming up to the idea of joint euro-zone bonds as a means to easing the euro-zone's financial crisis. The Stoxx Europe 600 index fell 0.1% to 219.98, extending its losing streak to six and undoing early gains made on a stronger-than-expected reading of German business sentiment. Most European markets turned lower after Merkel again criticized calls for the issuance of euro bonds following a meeting with French President Nicolas Sarkozy and Italian Prime Minister Mario Monti, saying that common interest rates for all euro-zone borrowers would send the wrong signal. Earlier, European markets had gained after the Ifo Institute reported that its November index of German business confidence rose to 106.6 from 106.4 in October, compared with expectations for a fall to 105.1. The German DAX 30 index shed 0.5% to 5428.11, and the U.K.'s FTSE 100 index shed 0.2% to 5127.57. Both have now fallen for nine consecutive days. In Lisbon, the PSI 20 index fell 0.9% to 5185.10 as Fitch Ratings downgraded Portugal's credit rating to junk status, and assigned it a negative outlook. Trade unions staged a 24-hour strike to protest government austerity measures. Banco Comercial Portugues slid 9.4%. The French CAC 40 index fell fractionally to 2822.25. Among banks, BNP Paribas gained 3.3% and Societe Generale rose 3%. In Brussels, shares of Belgian-Franco lender Dexia surged nearly 28%, though they remain down 86% year-to-date as investors continued to assess speculation that Belgian officials are seeking to renegotiate a bailout deal for the bank. Shares of Austrian-based Raiffeisen Bank International rose 5.9% as third-quarter profit at the Eastern Europe-focused lender fell less than analysts had expected.

Asian Markets

Most major Asian equity markets swung between small gains and losses Thursday, although Japanese shares took a sizeable drop as investors returning from a holiday caught up on global developments. Japan's Nikkei Stock Average ended down 1.8% at 8165.18, its lowest level in nearly 32 months, after missing steep losses on other Asian markets Wednesday. Moves were more muted across the rest of Asia, with Hong Kong's Hang Seng Index up 0.4% at 17,935.10, South Korea's Kospi 0.7% higher at 1795.06, and China's Shanghai Composite Index flat at 2397.55. Asian shares have been under broad selling pressure this week, as investors reacted to heightened concerns about Europe's debt crisis and its potential impact on global economic growth. Mainland Chinese real-estate firms gaining ground in Hong Kong included China Overseas Land & Investment Ltd., up 5.6%, Agile Property Holdings Ltd., 13.3% higher, and China Resources Land Ltd., up 4.3%. Many Chinese banking stocks also finished the day higher, with Agricultural Bank of China Ltd., up 2.6%, and Industrial & Commercial Bank of China Ltd. rising 1%. Japan saw losses for some of its blue-chip exporters, with Hitachi Ltd. down 2.5%, Fujitsu Ltd. down 2.6%, and Nintendo Co. down 4.3%. But shares of Olympus Corp. rose 17%, their daily limit.

Commodities

Base metals closed mixed on the London Metal Exchange Thursday, having drifted lower throughout the session amid downbeat macro sentiment and thin, lackluster trading conditions. At the close, flagship three month copper was just 0.4% higher on the day at $7,265 a metric ton. The red metal earlier hit a one-month low of $7,100.25/ton. Macroeconomic confidence was at a low ebb Thursday, weighing on risk-related assets such as base metals. A closely-watched meeting between the leaders of France, Germany and Italy to discuss the euro-zone crisis also disappointed markets. The absence of U.S. market participants during the Thanksgiving holiday meant LME trading was particularly subdued.