Don't miss



#THE 51%

For her pleasure: Is 'feminist porn' a contradiction?

Read more


Paris Saint-Germain football club opens new hub in Shanghai

Read more


'Europe has become the world’s largest exporter of ivory'

Read more


A reflection of our times: More women, more young people in Time 100 list for 2018

Read more


Commonwealth summit: African members seek to grow trade value to $2 trillion

Read more


Macron makes Time 100 list as France revolts

Read more


Turkey's rush to the polls: Erdogan calls snap election to cement his power

Read more


France's Macron likens divisions within EU to 'civil war'

Read more


Sting and Shaggy on making musical magic together

Read more


Markets rattled by fears of spreading debt crisis

Text by News Wires

Latest update : 2011-07-12

European shares tumbled for the third straight session and the euro slumped to a new four-month low Tuesday amid growing concern that the eurozone's debt crisis may spread to Italy and Spain.

REUTERS - Investors dumped the euro, peripheral euro zone government debt, and European shares on Tuesday as officials struggled to contain fears that the euro zone debt crisis was spreading to Italy and Spain.

Oil prices also fell.
In a bid to keep Italy and Spain from the same fate as Greece, Portugal and Ireland, euro zone finance ministers promised on Monday cheaper loans, longer maturities and a more flexible rescue fund. But they said new measures would be announced "shortly" and set no deadline.
Traders said markets also were under further pressure after new International Monetray Fund Managing Director Christine Lagarde failed to comment specifically on resolving Greece's debt problems.
Dutch Finance Minister added to investor nerves by saying a selective default for Greece was no longer being excluded.
"The topic is still the contagion from the bond markets to the FX markets. Italian and Spanish bonds have opened lower, and yields have gone up more, and this is going one-to-one with the euro," said Marcus Hettinger, global currency strategist at Credit Suisse in Zurich.
The euro extended Monday's steep falls to hit a four month low of $1.3863, down over one percent on the day. It plumbed another record low against the Swiss franc and lost 1.5 percent against the yen.
European shares extended losses into a third straight session, trading down around 2.6 percent in early trade.
"The bears have it today. There's very little reason for the market to see any strength," Justin Urquhart Stewart, director at Seven Investment Management, said.
"A lot of people have been really shaken by this. They didn't expect the Italian thing to blow up quite so quickly."
Yields on bonds issued by Italy and Spain marched relentlessly higher. Ten-year Italian yields went over 6 percent for the first time since 1997.
Billionaire investor George Soros said in a Financial Times editorial that Greece is heading for a disorderly debt default or at least a devaluation, and repeated his call for European Union leaders to adopt a "plan B" to stem contagion to the rest of the bloc.
Equities take a beating
Increasing risk aversion pushed World stocks down over 1.4 percent on the day after the Nikkei shed 1.4 percent. Stock markets in Australia lost 1.8 percent, South Korea declined 2.2 percent and Hong Kong gave up 1.9 percent.
"Every time we seem to be getting momentum, the European debt issue seems to rear its ugly head, and we are at the mercy of that," said Lucinda Chan, division director at Macquarie Equities.
Brent futures for August lost $2 to $115.20 a barrel.


Date created : 2011-07-12


    ECB holds eurozone key interest rate at 1.0 percent

    Read more


    EU mulls buying back Greek debt in bid to fend off contagion

    Read more


    IMF approves €3 billion loan payment to Greece

    Read more