Posted On: April 17, 2012
From This is Money
Some 2 per cent has been wiped off the FTSE 100 today as worries over Spain's debts deepen and another eurozone recession looms.
The fresh European woes followed yesterday's disappointment over the receding likelihood of further U.S. stimulus measures.
The Footsie is down 121.4 points at 5,717 late in the session, while in New York the Dow Jones has slid 166.2 points to 13,033.4. Germany's DAX and France's CAC 40 have both lost 3 per cent.
Michael Hewson of CMC Markets said: 'European markets have slid sharply today, partly as a result of the Federal Open Market Committee hangover last night, as the Fed minutes suggested that no quantitative easing would be forthcoming for the foreseeable future.
'That realisation set the negative tone for the day, but sentiment wasn't helped by disappointing European economic data out of Europe, while the final nail in the coffin was a poor Spanish bond auction which saw the government raise €1billion less than they were looking for, while yields [interest rates] shot up and the bid to cover [number of bidders for each bond] more than halved.
'If investors were hoping for some respite from the European Central Bank press conference they were disappointed as Mario Draghi reiterated that it was up to European governments to push through structural reforms with the time bought by the LTROs [cheap loans to banks].'
David Starkey of Western Union Business Solutions said: 'Acknowledging a slew of economic data that indicates the European recovery remains fragile, the European Central Bank has held interest rates at record low of 1 per cent.
'Recently Spain, the fourth largest economy in the eurozone, has been capturing headlines as it contributes to growth concerns. Namely stifling unemployment and widening borrowing costs in the country have observers worried that the worst is still to come for the euro.'
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