Greek crisis deepens, world stocks drop | business | Hindustan Times
Today in New Delhi, India
Jan 18, 2017-Wednesday
New Delhi
  • Humidity
  • Wind

Greek crisis deepens, world stocks drop

business Updated: Apr 08, 2010 22:41 IST

Highlight Story

World markets slid on Thursday amid mounting worries about a potential Greek debt default as the country’s borrowing costs continue to go through the roof.

In Europe, the FTSE 100 index of leading British shares was down 1.2 per cent, at 5,694.91 while Germany’s DAX fell 1.2 per cent, at 3,959.29. The CAC-40 in France was 1.7 per cent lower at 3,959.26. Wall Street was also poised to open lower after sizable falls on Wednesday.

Meanwhile, the European Central Bank (ECB) kept its main interest rate at a record low point of 1.0 per cent on Thursday, a bank spokesman said, but financial markets focused on worsening prospects for Greece. The policy will give investors a clearer idea of how much Greece’s sovereign debt will be worth and could thus help ease unrest that might otherwise spread to other weak eurozone members such as Portugal or Spain.

The main point of interest in the markets on Thursday ahead of the ECB rate decision is what is going on with Greek borrowing costs in the money markets — earlier the spread between Greek and German 10-year bond yields widened to 4.4 percentage points earlier, its highest level since the euro was introduced in 1999. The higher the spread, the less confidence markets are showing in Greece’s ability to pay.

Particularly worrying is that the spread between the Greek and German bonds swelled by a staggering 1.2 per centage points as investors demanded more interest just to hold Greek debt. Greek shares took another battering — the benchmark ASE composite index was down around 5 per cent.