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Violence in Greece, Spain Spooks Markets

Violence in Greece, Spain Spooks Markets

AP Business Writer
Markets were spooked Wednesday by scenes of violent protests on the streets of Athens and Madrid, which reignited concerns over Europe’s ability to implement the measures needed to deal with its big debts.

A day after U.S. stocks suffered their biggest retreat in three months on comments from a leading official at the Federal Reserve, investors have grown jittery. The euro was also down, further below $1.30, while oil prices retreated toward $90 a barrel, further indications of investor unease.

A general strike in Greece turned violent after demonstrators protesting against planned government spending cuts threw petrol bombs. A day earlier, clashes broke out at a similar demonstration in Madrid, which is also preparing new austerity measures.

In Europe, Spain’s IBEX index led the list of fallers, trading 3.9 percent lower at 7,856, while the yield on the country’s 10-year bond edged up to 6 percent.

Elsewhere, Germany’s DAX was 2.1 percent lower at 7,269 while the CAC-40 in France fell 2.6 percent at 3,422. The FTSE 100 index of leading British shares was down 1.7 percent at 5,758.

The falls marked a sharp end to weeks of upbeat investor sentiment. Markets have been buoyant since the European Central Bank unveiled in August a plan to lower the borrowing rates of countries like Spain and Italy and prevent a breakup of the 17-country eurozone. Fresh stimulus measures from major central banks also boosted sentiment.

On Wall Street, the Dow Jones industrial average was down 0.3 percent at 13,412 while the broader S&P 500 index fell 0.7 percent to 1,432.

The declines come on top of Tuesday’s falls, when U.S. stocks were hammered by a warning from the Fed’s Charles Plosser that the central bank’s efforts to support the world’s biggest economy would likely fall short of its goals.

Earlier in Asia, Japan’s Nikkei 225 stock average closed down 2 percent at 8,906.70 and Hong Kong’s Hang Seng dropped 0.8 percent to end at 20,527.73. South Korea’s Kospi shed 0.6 percent to 1,980.44. China’s Shanghai Composite Index shed 0.6 percent to 2,004.17.

The tensions weren’t just evident in stock markets _ the euro was down a further 0.5 percent at $1.2840. Only last week, it was trading at multi-month highs around $1.32.

Meanwhile, the benchmark New York oil contract was $1.27 lower at $90.10 a barrel.


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