(Reuters) - Jitters about the state of Greece and other euro zone peripheral economies rattled bond markets again on Wednesday, while pressure on banking stocks dragged down equity markets.
Wall Street looked set to open lower.
Bund futures hit a high as investors sought German debt, seeking shelter from the volatility in the Greek, Spanish and Portuguese debt markets.
Global stocks were flat but European stocks dipped after investor concern about banks outweighed support for food retailers.
Banks are being hit by a combination of worries over the International Monetary Fund (IMF) threat of new taxes to cover the cost of any bailouts, the Goldman Sachs (GS.N) fraud accusation and the rising cost of euro zone debt.
"The IMF campaign and the action taken by the SEC (Securities and Exchange Commission) and the FSA (Financial Services Authority) against Goldman is adding to a degree of uncertainty, so that anyone who is buying banks is doing so on a short-term basis," said Josh Raymond, market strategist at City Index.
These concerns overshadowed good earnings from Apple (AAPL.O) reported late on Tuesday, which had helped Asian tech stocks to rally and encouraged sentiment that consumer demand was recovering.
MSCI's all-country world index .MIWD00000PUS was flat, with its more volatile emerging market component .MSCIEF up 0.4 percent.
In Europe, the pan-European FTSEurofirst 300 .FTEU3 was down 0.4 percent. Earlier, in Japan, the Nikkei .N225 closed up 1.74 percent.
EURO DOWN, LOONIE GAINS
The euro was down 0.5 percent at $1.3366 and slipped against Britain's pound, the Swiss franc and the Japanese yen.
"While the market appears to have priced in the Greek developments, the situation remains fluid," Brown Brothers Harriman said in a note.
The low-yielding yen came under pressure as the strong U.S. earnings fed a rebound in demand for riskier currencies, while the Canadian dollar, or loonie, climbed to its highest level in nearly two years.
This followed an indication from the Bank of Canada that an interest rate rise may come as early as June.
In fixed income markets the spread between Greek government bonds and euro zone benchmark Bunds rose to its highest level in 12 years. The cost of insuring Greek government debt also rose.
"Liquidation in the periphery has been the trigger in the last hour. But liquidity is awful and bids are very low. So it doesn't take much to get things going," said a bond trader.
