Dow drops as eurozone crisis continues
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The Dow Jones dropped below 10,000 for the first time in three months as the sovereign crisis continued in the eurozone.
The Dow ended at 9,908, down 103.84. This was the lowest end of day trading since the first weeks of November 2009. This came after traders bet £5.1bn against the Euro, according to the Financial Times. The FT says this is the biggest ever short against the single currency.
The FTSE began this morning at 5,089.26, one of the lowest points for the market this year. It has since rallied, and by 9am it was up to 5,101.66, up 9.48.
The Nikkei also dropped thanks to fears of a eurozone crash - it fell to a two month low at close yesterday of 9,932.9.
Credit Sights sovereign analyst Steven Zausner says that while Greece has promised to reduce its debt from 12.8 per cent of GDP to 2.8 per cent within three years, the markets are not so confident. He says that if the Greek government does default over the coming months it will have to pull out of the euro, leaving many doubting the abilities of fellow strugglers Portugal, Spain, Italy and Ireland to be able to stay in the single currency while managing huge public debts.
He says: “If the Greeks do not regain the markets’ confidence and the government is bailed out by the EU it would be a supremely humiliating moment for the EU, the European Central Bank, the International Monetary Fund. Pressure would build on Portugal, Italy, Spain and Ireland which could ultimately cause the Euro-area to fail.”
