European stocks slump
LONDON — European stock markets slumped on Monday, with banks hit by increasing signs that the eurozone debt crisis is spreading to Italy, as EU policymakers headed to an urgent meeting…
LONDON — European stock markets slumped on Monday, with banks hit by increasing signs that the eurozone debt crisis is spreading to Italy, as EU policymakers headed to an urgent meeting on Greece.In London, BSkyB shares slumped more than seven percent on turmoil over the British satellite broadcaster's future.In late afternoon deals, London's FTSE 100 index of top shares dropped 1.17 percent to 5,920.66 points, Frankfurt's DAX 30 shed 2.49 percent to 7,218.78 points and in Paris the CAC 40 index lost 2.84 percent to 3,802.52.In Milan, Italy's leading FTSE Mib index dived 4.40 percent to 18,210 points, while Madrid's IBEX-35 tumbled 3.0 percent to 9,640.50.The market on Wall Street dived in opening trading on Monday amid signs of a deepening European crisis, with the Dow Jones Industrial Average falling 0.85 percent in the first half-hour of trade.Italian stocks also dropped sharply and the financial regulator imposed tougher rules on short-selling in a bid to prevent speculators from targeting the eurozone's third-largest economy."In terms of debt market indicators, Italy has become the new pressure point in Europe's debt crisis," said Jan Randolph, head of sovereign risk at the IHS Global Insight consultancy in London."Hedge funds have been known to have entered the Italian debt space, shorting the Italian sovereign bond markets."The long-term cost of borrowing for Italy and Spain reached record high levels on Monday on concern that the eurozone debt crisis could spread to these two countries, traders said.The price of debt bonds issued by Italy and Spain fell further, automatically pushing up the indicated yield, or rate, of the fixed interest attached to the instruments.The rate on 10-year bonds issued by Italy rose to 5.5 percent and on Spanish 10-year debt to 5.9 percent. These rates were at the highest levels since the creation of the eurozone.However, Randolph added: "There is no real new fundamental basis in Italy for this market aversion towards Italy."Italy did not have a property bubble; the fi
last modification 2011-07-11 17:45:05
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