KurtFF8
28th April 2010, 18:29
(Yes this is a headline from today)
Source (http://news.yahoo.com/s/afp/20100428/bs_afp/stocksforexbondseurope;_ylt=AtXbZ6aTxWs3tg8LYfv30. Ws0NUE;_ylu=X3oDMTNuZjkwZnI5BGFzc2V0A2FmcC8yMDEwMD QyOC9zdG9ja3Nmb3JleGJvbmRzZXVyb3BlBGNjb2RlA21vc3Rw b3B1bGFyBGNwb3MDMgRwb3MDNwRwdANob21lX2Nva2UEc2VjA3 luX3RvcF9zdG9yeQRzbGsDZ3JlZWtmaW5hbmNp)
by Roland Jackson Roland Jackson – Wed Apr 28, 6:06 am ET
LONDON (AFP) – Greece's deepening financial crisis sent stock markets and the euro reeling again on Wednesday after its debt was slashed to junk status, fanning fears of a default.
A fierce global equities sell-off was sparked on Tuesday after ratings agency Standard & Poor's cut Greek debt to junk status, while a downgrade to Portugal also stoked concerns about a widening eurozone crisis.
As the European Union announced that it would hold an emergency summit on Greece, the Frankfurt stock market plummeted 1.93 percent and Paris plunged 2.16 percent in late morning deals.
London fell 0.98 percent, one day after suffering its biggest one-day loss since November.
Lisbon tumbled 5.56 percent and Madrid fell by 2.72 percent, while Athens was down 1.69 percent after massive losses in recent days.
"Any hope that the Greek issue was finally coming under control took a huge blow yesterday with the country's sovereign debt being downgraded to junk," said IG Markets analyst Ben Potter.
The news sparked "a quick run of selling on equity markets across the globe that was reminiscent of the chaos of 2008," he added.
The debt drama also rattled Asian markets, with Tokyo slumping 2.57 percent and Hong Kong diving 1.26 percent in value.
Wall Street shed 1.90 percent overnight, with the Dow Jones Industrial Average finishing under the symbolic level of 11,000 points, as Greece and Portugal downgrades reverberated across the globe.
"The downgrading of Portuguese and Greek debt has spooked investors, as there is a very real fear that other European countries could be downgraded too," said analyst Owen Ireland at ODL Securities.
In the foreign exchange market on Wednesday, the European single currency hit a new one-year dollar low.
The euro plunged to 1.3143 dollars -- a low last seen in April 2009 -- as traders fretted over a debt crisis that could spread to other fiscally-challenged nations like Spain, Italy and Ireland.
In bond market trade on Wednesday, the yield on 10-year Greek sovereign bonds soared to 11.076 percent, the highest 10-year level ever recorded in the eurozone, after 9.73 percent on Tuesday.
"The S&P downgrades to Portugal and Greece brought a fresh bout of fears to equity and credit markets alike, with concerns over contagion effects continuing to rise," said analyst Deidre Ryan at Goodbody's stockbrokers.
"Along with the spike in peripheral euro-area bond yields, the euro also continues to weaken, falling below the 1.32-dollar level to its lowest level in a year."
Reeling from a debt and public deficit crisis, Greece has appealed for emergency loans totalling 45 billion euros (60 billion dollars) from the European Union and the International Monetary Fund.
The funds would be made availaible on condition that Greece implemented tough austerity measures, currently the subject of talks with the EU and the IMF.
The IMF is considering raising its Greek financial aid by 10 billion euros (13 billion dollars), having already offered 15 billion as part of the emergency loans, the Financial Times reported Wednesday.
In response the latest news, the European Union has called an emergency summit on Greece, with eurozone leaders set to meet next month.
EU President Herman Van Rompuy said leaders from the 16 nations using the single currency would meet in Brussels "by around May 10" to try to agree how to set up a massive rescue operation.
Speaking in Tokyo, Van Rompuy said there was "no question" of Greece defaulting.
GFT analyst David Morrison said that German Chancellor Angela Merkel would not want to hold the EU summit prior to this date.
"Of course it is the day after the German regional elections and Angela Merkel dare not OK a Greek bailout before then because she will get hammered," Morrison told AFP.
"But the likelihood is that the bond markets will force quicker action," he added.
Across in Athens on Wednesday, strikes and protests erupted as its crisis-hit economy reeled from another scathing downgrade of its debt and the stock exchange took emergency measures to deter speculators.
Amidst a growing recession, a general strike has been called for May 5 against austerity cuts that the government is enforcing to slash the rampant public deficit and debt worth nearly 300 billion euros (399 billion dollars).
Morrison added: "One thing is for sure -- Greece needs considerably more than the 45 billion euros on offer.
"Having heard that restructuring was not even being considered yesterday, the market has jumped forward and is now looking at outright default."
Oil prices also sank on Wednesday, shaken by the Greek crisis and the strong US currency, which makes dollar-priced crude more expensive for foreign buyers.
So the Greek crisis is far from over, and it seems to be spreading to the broader Eurozone (Portugal seems to be the next spot of crisis).
This is quite an interesting development and shows that the global financial crisis is far from over.
Source (http://news.yahoo.com/s/afp/20100428/bs_afp/stocksforexbondseurope;_ylt=AtXbZ6aTxWs3tg8LYfv30. Ws0NUE;_ylu=X3oDMTNuZjkwZnI5BGFzc2V0A2FmcC8yMDEwMD QyOC9zdG9ja3Nmb3JleGJvbmRzZXVyb3BlBGNjb2RlA21vc3Rw b3B1bGFyBGNwb3MDMgRwb3MDNwRwdANob21lX2Nva2UEc2VjA3 luX3RvcF9zdG9yeQRzbGsDZ3JlZWtmaW5hbmNp)
by Roland Jackson Roland Jackson – Wed Apr 28, 6:06 am ET
LONDON (AFP) – Greece's deepening financial crisis sent stock markets and the euro reeling again on Wednesday after its debt was slashed to junk status, fanning fears of a default.
A fierce global equities sell-off was sparked on Tuesday after ratings agency Standard & Poor's cut Greek debt to junk status, while a downgrade to Portugal also stoked concerns about a widening eurozone crisis.
As the European Union announced that it would hold an emergency summit on Greece, the Frankfurt stock market plummeted 1.93 percent and Paris plunged 2.16 percent in late morning deals.
London fell 0.98 percent, one day after suffering its biggest one-day loss since November.
Lisbon tumbled 5.56 percent and Madrid fell by 2.72 percent, while Athens was down 1.69 percent after massive losses in recent days.
"Any hope that the Greek issue was finally coming under control took a huge blow yesterday with the country's sovereign debt being downgraded to junk," said IG Markets analyst Ben Potter.
The news sparked "a quick run of selling on equity markets across the globe that was reminiscent of the chaos of 2008," he added.
The debt drama also rattled Asian markets, with Tokyo slumping 2.57 percent and Hong Kong diving 1.26 percent in value.
Wall Street shed 1.90 percent overnight, with the Dow Jones Industrial Average finishing under the symbolic level of 11,000 points, as Greece and Portugal downgrades reverberated across the globe.
"The downgrading of Portuguese and Greek debt has spooked investors, as there is a very real fear that other European countries could be downgraded too," said analyst Owen Ireland at ODL Securities.
In the foreign exchange market on Wednesday, the European single currency hit a new one-year dollar low.
The euro plunged to 1.3143 dollars -- a low last seen in April 2009 -- as traders fretted over a debt crisis that could spread to other fiscally-challenged nations like Spain, Italy and Ireland.
In bond market trade on Wednesday, the yield on 10-year Greek sovereign bonds soared to 11.076 percent, the highest 10-year level ever recorded in the eurozone, after 9.73 percent on Tuesday.
"The S&P downgrades to Portugal and Greece brought a fresh bout of fears to equity and credit markets alike, with concerns over contagion effects continuing to rise," said analyst Deidre Ryan at Goodbody's stockbrokers.
"Along with the spike in peripheral euro-area bond yields, the euro also continues to weaken, falling below the 1.32-dollar level to its lowest level in a year."
Reeling from a debt and public deficit crisis, Greece has appealed for emergency loans totalling 45 billion euros (60 billion dollars) from the European Union and the International Monetary Fund.
The funds would be made availaible on condition that Greece implemented tough austerity measures, currently the subject of talks with the EU and the IMF.
The IMF is considering raising its Greek financial aid by 10 billion euros (13 billion dollars), having already offered 15 billion as part of the emergency loans, the Financial Times reported Wednesday.
In response the latest news, the European Union has called an emergency summit on Greece, with eurozone leaders set to meet next month.
EU President Herman Van Rompuy said leaders from the 16 nations using the single currency would meet in Brussels "by around May 10" to try to agree how to set up a massive rescue operation.
Speaking in Tokyo, Van Rompuy said there was "no question" of Greece defaulting.
GFT analyst David Morrison said that German Chancellor Angela Merkel would not want to hold the EU summit prior to this date.
"Of course it is the day after the German regional elections and Angela Merkel dare not OK a Greek bailout before then because she will get hammered," Morrison told AFP.
"But the likelihood is that the bond markets will force quicker action," he added.
Across in Athens on Wednesday, strikes and protests erupted as its crisis-hit economy reeled from another scathing downgrade of its debt and the stock exchange took emergency measures to deter speculators.
Amidst a growing recession, a general strike has been called for May 5 against austerity cuts that the government is enforcing to slash the rampant public deficit and debt worth nearly 300 billion euros (399 billion dollars).
Morrison added: "One thing is for sure -- Greece needs considerably more than the 45 billion euros on offer.
"Having heard that restructuring was not even being considered yesterday, the market has jumped forward and is now looking at outright default."
Oil prices also sank on Wednesday, shaken by the Greek crisis and the strong US currency, which makes dollar-priced crude more expensive for foreign buyers.
So the Greek crisis is far from over, and it seems to be spreading to the broader Eurozone (Portugal seems to be the next spot of crisis).
This is quite an interesting development and shows that the global financial crisis is far from over.