Today's Coming Crisis Movie

Monday, May 23, 2011

Markets hit by continuing eurozone debt crisis

The euro and stock markets across Europe have fallen, with the eurozone debt crisis showing no sign of abating.

Borrowing costs for heavily indebted governments also rose further, with Italy and Spain suffering.

Market worries focus on a possible debt restructuring by Greece that could hit Europe's banks and other governments.

Latest bad news included weak eurozone economic data, a local election defeat for Spain's government and a negative credit rating outlook for Italy.

Business confidence

European stock markets were down sharply in afternoon trading, with the FTSE 100 1.5% lower, the Cac losing 1.8%, and the Dax falling 1.9%.

Energy and mining stocks were particularly badly hit, as the oil price fell back towards recent lows on fears the global recovery may be slowed by debt problems in Europe and tighter monetary policy in China.

Meanwhile, the euro dropped two cents against the dollar, to below $1.40, bringing its total fall since Friday to nearly four cents.

Jean-Claude Juncker Luxembourg Prime Minister and head of the eurogroup

Against the Swiss franc - seen as a haven from the debt crisis - the euro hit a new all-time low of 1.2324 francs.

Sentiment was not helped by the latest purchasing managers index (PMI) for the eurozone - a survey of business expansion plans - which indicated that growth in France and Germany slowed significantly this month. (read more)