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European stocks markets flat after falls in Asia | |
(about 3 hours later) | |
European stock markets opened little changed, although bank shares were under pressure on continuing concerns about the eurozone debt crisis. | |
Despite Asian markets closing down, Europe's main bourses began the day slightly higher, with the FTSE 100 and Germany's Dax about up 0.2%. | |
Spain's Ibex market opened down 0.2%, although banks Santander and BBVA were down 1.3% and 0.9% respectively. | |
In Asia, the Nikkei 225 index fell 1% while the Hang Seng index dropped 0.6%. | |
On Monday, Spanish bond yields rose to almost 6.5%, while ten-year Italian bond yields rose to 6.032%. Later on Tuesday Greece is due to raise money on the bond markets. | |
After an initial relief rally following the bailout of Spanish banks, analysts said the markets have returned to a mood of caution. | |
"This is a realization that Spain, while providing money for its banks, is going to add to its debt-to-GDP ratio," said Paul Zemsky, head of asset allocation at ING Investment Management. | "This is a realization that Spain, while providing money for its banks, is going to add to its debt-to-GDP ratio," said Paul Zemsky, head of asset allocation at ING Investment Management. |
"They're borrowing more money, not doing anything about growth," he added. | "They're borrowing more money, not doing anything about growth," he added. |
"Today we're not worried about Spain's banking system falling off a cliff, but other than that, nothing's changed." | "Today we're not worried about Spain's banking system falling off a cliff, but other than that, nothing's changed." |
'Too little too late' | 'Too little too late' |
While the eurozone debt crisis has been a cause of concerns for sometime, it has so far affected relatively smaller economies such as Greece and Portugal. | While the eurozone debt crisis has been a cause of concerns for sometime, it has so far affected relatively smaller economies such as Greece and Portugal. |
However, as the crisis spreads to bigger nations such as Spain and Italy, there are fears that growth in the region may slow even further. | However, as the crisis spreads to bigger nations such as Spain and Italy, there are fears that growth in the region may slow even further. |
Analysts said that this one one key reason that stock markets in the US and Europe fell on Monday after the initial euphoria over the 100bn-euro ($125bn; £80bn) bailout of Spain's banks announced over the weekend. | Analysts said that this one one key reason that stock markets in the US and Europe fell on Monday after the initial euphoria over the 100bn-euro ($125bn; £80bn) bailout of Spain's banks announced over the weekend. |
In the US, New York's Dow Jones fell 1.1% while in Europe London's FTSE 100 closed down 2.7 points. The French and German indexes were little changed. | In the US, New York's Dow Jones fell 1.1% while in Europe London's FTSE 100 closed down 2.7 points. The French and German indexes were little changed. |
"The eurozone crisis needs much more than short-term measures - but all the investors are seeing is political infighting rather than a collective long-term plan," Justin Harper of IG Markets told the BBC. | "The eurozone crisis needs much more than short-term measures - but all the investors are seeing is political infighting rather than a collective long-term plan," Justin Harper of IG Markets told the BBC. |
"The European policy makers are slow to react to the issues. They are doing too little, too late." | "The European policy makers are slow to react to the issues. They are doing too little, too late." |
Broader falls | Broader falls |
The falls were not limited to just the stock markets. Oil prices fell further in Asian trade after declining in New York on Monday. | The falls were not limited to just the stock markets. Oil prices fell further in Asian trade after declining in New York on Monday. |
Brent Crude dropped almost 1% in early trade to as low as $96.62 a barrel. US light crude fell $1.15 to $81.55 a barrel. | Brent Crude dropped almost 1% in early trade to as low as $96.62 a barrel. US light crude fell $1.15 to $81.55 a barrel. |
Analysts said the latest fears arising from eurozone had added to worries about a global slowdown hurting demand for oil. | Analysts said the latest fears arising from eurozone had added to worries about a global slowdown hurting demand for oil. |
They said that a fragile recovery in the US coupled with slowing growth in emerging markets such as China and India had hurt investor sentiment. | They said that a fragile recovery in the US coupled with slowing growth in emerging markets such as China and India had hurt investor sentiment. |
"It is a continued set of bad news from all across the globe, and we have been belted with it for months on end without any let up," said David Lennox a resources analysts with Fat Prophets in Sydney. | "It is a continued set of bad news from all across the globe, and we have been belted with it for months on end without any let up," said David Lennox a resources analysts with Fat Prophets in Sydney. |
Mr Lennox added that if global economic uncertainty continues and oil production levels remain the same, prices may fall even further. | Mr Lennox added that if global economic uncertainty continues and oil production levels remain the same, prices may fall even further. |
"There is certainly a risk of that happening." | "There is certainly a risk of that happening." |