Morning traders.Market wrap: Shares are set to open lower after...

Morning traders.

Market wrap:

Shares are set to open lower after European and US stocks dived on fears that the unpopular Cyprus bail-out is the new template for Europe's debt crisis.

The June SPI 200 futures contract sagged 44 points or 0.9% to 4960 as initial euphoria over the Cyprus plan turned to concern after the head of the euro-zone's finance ministers suggested depositors in other nations' banks face levies in any future bank restructures. US stocks pared their losses after Dutch Finance Minister Jeroen Dijsselbloem tempered his comments, but the damage was done.

The S&P 500 came within a point of its all-time record before Mr Dijsselbloem's remarks spooked the market. The benchmark index traded as high as 1,565 and as low as 1,546 before closing five points or 0.31% lower at 1,552. The Dow lost 64 points or 0.44% and the Nasdaq gave up 0.31%.

"We were having too much of a celebration over the near-term success of fixing the Cyprus problem, but the devil is in the details, and the details are still coming out," Art Hogan, market strategist at Lazard Capital Markets in the US, told MarketWatch. "The good news is disaster has been avoided; the bad news is the knock-on effect."

The Dutch Finance Minister told interviewers the EU aimed to push the risks associated with Europe's beleaguered banking system back on to the banks and their clients. "If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'. If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders," he told Reuters.

A relief rally in Europe soured as traders dumped the continent's banks amid fears of capital flight. Heavy falls in the likes of France's Societe Generale -6.02%, Spain's Banco Santander -3.24%, Italy's UniCredit SpA -5.81% and even Germany's Deutsche Bank -2.66% helped push Italy's FTSE MIB share index down 2.5%, Spain's IBEX 35 2.26%, France's CAC 1.12%, Germany's DAX 0.51% and Britain's FTSE 0.23%.

Dijsselbloem later issued a statement saying that "macro-economic adjustment programs are tailor-made to the situation of the country concerned and no models or templates are used", but the clarification did little to arrest declines on Wall Street. Rio Tinto lost 1.65% and BHP 0.89%.

Oil surged as high as US$95.71 and settled at a one-month high despite a rising US dollar. West Texas Intermediate crude for May delivery was lately 83 cents or 0.9% ahead at US$94.53 a barrel.

Gold traded as low as US$1,588.40 before paring losses as concerns over the terms of the Cypriot bail-out offset the rising greenback. Gold for April delivery was lately down $3 or 0.2% at US$1,603.10 an ounce.

Copper retreated after the Shanghai Futures Exchange announced on Friday that Chinese stockpiles have reached their highest in more than 10 years, raising doubts about demand. US copper for May delivery was recently down two cents or 0.5% at US$3.45 a pound. In London, copper lost 0.2%, aluminium 0.8%, nickel 0.85% and zinc 0.7%. Tin put on 0.55% and lead edged up 0.05%.

TRADING THEMES TODAY

HANGOVER SETS IN QUICKLY: The Cyprus bailout party lasted just a few hours in Europe and the US last night before a Dutch wowser turned off the lights. Minister Dijsselbloem's remarks may not be unreasonable, but you don't prop up a staggering banking system by telling depositors their money isn't safe. All things considered, the falls in the US could have been worse - there were still buyers looking to get in on any dip, so the medium-term outlook appears positive. Our market will open weak but a partial recovery would not surprise, provided US futures and Asian markets are stable. Meanwhile, the specs are running hot, oblivious to events in the broader market.

ECONOMIC NEWS: Reserve Bank Governor Glenn Stevens is due to address ASIC's Annual Forum at 3.45pm EST. The US has some meaty domestic news to distract it from Cyprus tonight, including monthly durable goods orders/core durable goods, consumer confidence, new home sales and the Richmond Manufacturing Index.

Good luck to all.