GLOBAL MARKETS-Stocks, euro struggle as investors turn risk-averse

HONG KONG: The euro and the U.S. dollar slipped to record lows against the Swiss franc on Monday, July 18 while equities struggled to stay in positive territory as the ongoing debt crises in the U.S. and the euro zone kept investors from adding to their risky assets.

With policymakers on both sides of the Atlantic offering no clear solutions to the markets on their respective debt problems, risk-averse investors are expected to continue piling up perceived safe-haven instruments like gold -- which hit a record high on Monday -- and bonds.

Even the better-than-expected results of a "stress test" conducted by the European Banking Authority on Friday failed to dispel the broader gloom sweeping across markets.

The European Banking Authority (EBA) said that of 8 of 90 European banks had failed "stress tests" performed to determine if they could withstand a long recession. Expectations were for up to 15 banks to fall short.

Some analysts however said the stress tests weren't very rigorous and with the results out of the way, market focus would switch right back to the sovereign debt crisis engulfing the euro zone.

In currency markets, the euro and dollar both struck record lows against the Swiss franc in Asia in early trades on Monday.

The euro gapped lower against the Swiss franc to change hands at a trough of 1.1365 according to dealers, down from 1.1501 late in New York on Friday.

The dollar traded as low as $0.8034 on EBS, against $0.8129 late on Friday even as Republican and Democratic senators sought on Sunday to craft a plan that could avert a government debt default should the talks remain stalemated. .

Spot gold hit a record high on Monday at $1,598.41 per ounce, on track for an eleventh straight day of gains.

Equities extended losses after suffering their biggest weekly loss since February with the MSCI index of shares ex-Japan down 0.5 percent in early trades. It fell 3.1 percent last week.

Stock markets in Seoul and Australia were trading in the red. Japanese markets are shut for a holiday. - Reuters

In oil markets, U.S. crude for August delivery held on to last week's gains at above $97.24 per barrel due to some short covering and lower supplies. - Reuters