Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

GLOBAL MARKETS-World stocks hit by Greek debt, China inflation

Published 04/14/2011, 07:25 AM
Updated 04/14/2011, 04:08 AM

* Euro falls on Greek debt restructuring concerns

* Wall Street set for losses

* Japan's Tankan points to supply chain problems

By Jeremy Gaunt, European Investment Correspondent

LONDON, April 14 (Reuters) - European stocks sank, peripheral debt yields soared and the euro fell on Thursday as concern that Greece will have to restructure its debt gathered pace while Chinese inflation returned as an investment concern.

Wall Street looked set to open lower, with the spotlight on the possible impact of rising raw material costs on corporate margins.

World stocks were 0.4 percent lower despite a burst of corporate activity that would usually lift investors' spirits.

Glencore, the world's largest commodities trading company, plans to raise up to $12.1 billion in a London and Hong Kong stock market flotation that is London's biggest ever. Shares in Japan's Isuzu Motors jumped on a report that Volkswagen was considering buying all or part of it.

European shares, as measured by the FTSEurofirst 300, were down three quarters of a percent, only around half a percent higher than at the end of last year.

Greek bond yields soared, with short-dated paper coming under the most intense pressure, as markets priced in a greater probability that Athens would be forced to restructure its runaway debt.

Yields of other peripheral euro zone states also rose sharply.

European stocks were also pressured, however, by concern that Chinese inflation is returning.

Hong Kong's Phoenix TV, citing an unnamed source, said China's annual rate of inflation in March was likely to be 5.3-5.4 percent, a 32-month high and just above an estimate in a Reuters poll.

Investors are particularly concerned about Chinese inflation in case government attempts to restrain it prompt a 'hard landing' for the economy.

"Inflation in emerging economies has become a serious issue, as the impact from high commodity prices is stronger for those countries," said Arnaud Scarpaci, fund manager at Paris-based Agilis Gestion.

Earlier, the Nikkei benchmark closed up 0.1 percent, held back by continued worries about the impact of its earthquake, tsunami and nuclear disasters.

The Reuters Tankan survey of 400 large firms found on Thursday that power shortages caused by the crippled Fukushima nuclear plant had hit nearly 60 percent of local companies, disrupting production and supply chains.

EURO HIT

The euro slipped broadly, hitting a session low versus the dollar on debt restructuring worries.

It fell to the day's trough around $1.4376. Earlier in the day it had hit a session high around $1.4515 but came under additional selling pressure after a break under $1.4450 triggered stop-loss orders.

The euro struggled across the board, falling roughly 1.2 percent on the day against the yen to 121.03 yen according to Reuters data.

Earlier, the dollar hit a 16-month low against a basket of major currencies, but pared back the losses.

(Additional reporting by Blaise Robinson and William James; Editing by John Stonestreet)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.