Monday, March 12, 2012

European stock markets outlook 03/13/2012

European stock markets outlook 03/13/2012, bond market march 13 2012, European stock markets flipped between small gains and losses Monday, as investors tried to come to grips with the latest news on Greece's debt, while basic-resources stocks edged lower following disappointing data out of China.

The Stoxx Europe 600 index ended down 0.2% at 264.87. The U.K.'s FTSE 100 index rose 0.1% to 5892.75 and Germany's DAX index rose 0.3% to 6901.35, while France's CAC-40 index edged 0.1% higher to 3490.06.

Greece's ASE Composite lost 2.5% to 733.89, while Portugal's PSI index fell 1.5% to 5570.12. Investors refrained from building positions, as they weighed the significance of a Greek credit event.

The International Swaps and Derivatives Association, the regulatory authority on credit-default swaps, ruled late Friday that the Greek debt restructuring was a credit event, thus triggering payouts.

This helps the integrity of the credit-default swaps market but adds to the nervousness in markets. Greek bonds issued after the country's bond-swap deal last week began trading Monday at the highest yields in the euro zone.

Meanwhile, the Stoxx Europe 600 basic resources index was one of the biggest sector decliners, falling 1.2% after China posted a surprisingly high $31.48 billion trade deficit for February, following a $27.28 billion surplus in January.

In London, heavyweight miner Rio Tinto declined 1.7% and Vedanta Resources PLC was off 3.7%. Energy firms were also lower: Petrofac lLC lost 1.1%, while Royal Dutch Shell was off 0.6%.

Economic data were sparse, although the release of fourth-quarter Italian gross-domestic-product data confirmed that the country fell into recession.

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