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Greece gloom descends upon global markets
9 Apr 2010, 0120 hrs Bureau & Agencies
Global markets were on the edge fearing a fresh wave of contagion on a possible Greek default, rising interest rates and joblessness in Euro, the US.
“Sentiment remains fragile about the macro environment and the potential for further disruption to the global financial system,” London-based Henk Potts at Barclays Stockbrokers told Bloomberg. “The contagion effect is perhaps the biggest concern when it comes to Greece and that it will spill over into Spain and Portugal.”
European Central Bank president Jean-Claude Trichet said he did not expect Greece to default on its loans. But Greek bonds plunged on renewed concerns about the country’s ability to cut budget deficit. It has to sell $15.4 billion of debt by the end of next month. The premium demanded by investors to hold Greek 10-year bonds over German counterparts rose to the largest since the euro’s debut in 1999, Bloomberg reported.
Investors stung by the previous credit crisis are shifting to safe investments such as the US treasury. They fear the recovery in the West may take longer as consumer spending remains depressed on joblessness and some emerging markets such as China and India may be overheating.
Initial jobless applications in the US increased by 18,000 to 460,000 in the week ended April 3.
9 Apr 2010, 0120 hrs Bureau & Agencies
Global markets were on the edge fearing a fresh wave of contagion on a possible Greek default, rising interest rates and joblessness in Euro, the US.
“Sentiment remains fragile about the macro environment and the potential for further disruption to the global financial system,” London-based Henk Potts at Barclays Stockbrokers told Bloomberg. “The contagion effect is perhaps the biggest concern when it comes to Greece and that it will spill over into Spain and Portugal.”
European Central Bank president Jean-Claude Trichet said he did not expect Greece to default on its loans. But Greek bonds plunged on renewed concerns about the country’s ability to cut budget deficit. It has to sell $15.4 billion of debt by the end of next month. The premium demanded by investors to hold Greek 10-year bonds over German counterparts rose to the largest since the euro’s debut in 1999, Bloomberg reported.
Investors stung by the previous credit crisis are shifting to safe investments such as the US treasury. They fear the recovery in the West may take longer as consumer spending remains depressed on joblessness and some emerging markets such as China and India may be overheating.
Initial jobless applications in the US increased by 18,000 to 460,000 in the week ended April 3.
