Greek bonds dropped, sending the yield premium over German debt to the widest since the euro’s inception, and stocks tumbled on speculation that the bailout of Europe’s most indebted nation will unravel. The yen rallied.
“There is now increasing uncertainty surrounding Greece’s ability to raise the required amount of funding without recourse to the emergency lending facility provided by euro member states and the IMF.
Finance Minister George Papaconstantinou said Greece doesn’t need additional austerity measures, hours before European Central Bank President Jean-Claude Trichet is expected to announce changes to the collateral the central bank accepts for loans as it looks to support the nation.
Emerging Markets
The MSCI World Index of 23 developed nations’ stocks fell 0.6 percent while the MSCI Emerging Markets Index fell for the first time in 10 days, sliding 0.9 percent. In Europe, all 19 industry groups in the Stoxx 600 declined, led by basic resources shares and banks. BHP Billiton Ltd., the world’s biggest mining company, dropped 1.6 percent in London. The MSCI Asia Pacific Index lost 0.7 percent, its first drop in six days.
Source: Bloomberg.
