* Global stocks slip on Iraq concerns
* German government bond yields fall
* Dollar eases against yen
By Atul Prakash
LONDON, June 25 Europe's top share index slipped
to a three-week low on Wednesday as concerns that violence in
Iraq could escalate further prompted investors to take refuge in
safer assets such as German bonds.
The FTSEurofirst 300 index of top European shares
fell 0.7 percent to its lowest since early June, while Germany's
DAX share index dropped 0.5 percent by 1015 GMT. The
MSCI world equity index, which tracks shares in
45 countries, fell 0.3 percent to a one-week low.
"Iraq tensions have overshadowed relatively good economic
data this week," said Lorne Baring, managing director of B
Capital Wealth Management in Geneva.
"Investors are still concerned about American foreign policy
and what will be the next step in terms of any military
intervention as opposed to diplomacy in the Middle East region."
Militants attacked one of Iraq's largest air bases as the
first U.S. teams arrived to assess the Iraqi security forces and
decide how to help counter a mounting Sunni insurgency. Advances
by militants have threatened to rupture the country
two-and-a-half years after the withdrawal of U.S. troops.
The weakness in European stocks followed a sell-off in
overseas markets. MSCI's broadest index of Asia-Pacific shares
outside Japan fell 0.4 percent, while Japan's
Nikkei ended 0.7 percent lower. In volatile U.S.
trading, the S&P 500 closed 0.6 percent weaker after
hitting a fourth record high following upbeat U.S. data.
Risk-averse investors turned their attention to relatively
safer assets. Yields of German government bonds, perceived as
safe havens, fell towards their lowest this year. German 10-year
yields were 3 basis point lower at 1.29 pct
"It's a volatile situation in Iraq and Treasuries and Bunds
benefit from flight to quality," said Nick Stamenkovic, bond
strategist at RIA Capital Markets in Edinburgh.
Oil markets were mixed as traders weighed the likelihood of
supply disruptions from Iraq. Analysts said lingering worries
that continued violence in Iraq would dent supplies from OPEC's
second-largest producer kept a floor under prices.
U.S. crude for August delivery advanced 0.6 percent,
while Brent crude for August fell 0.5 percent.
"Oil prices have been unusually stable in recent years, but
events in Iraq are causing a reassessment of medium-term oil
market fundamentals that we expect to translate into a phase of
higher long-term prices and more volatile trading conditions,"
strategists at Barclays said in a note to clients.
In the currency market, the dollar slipped against the yen,
with some investors cautious ahead of the final reading of
first-quarter U.S. GDP.
It is forecast to be revised down and is likely to boost
expectations that the Federal Reserve is in no hurry to tighten
policy. The dollar was down 0.1 percent versus the yen at 101.90
(Additional reporting by Blaise Robinson in Paris, Marius
Zaharia and Anirban Nag in London and Lisa Twaronite in Tokyo;
Editing by Catherine Evans)