Tuesday, November 1, 2011

Europe starts tearing itself apart, starting with bank stocks

I have been watching this drama unfold via Twitter posts:

  





 
From Bloomberg:

European stocks dropped, for the Stoxx Europe 600 Index’s biggest plunge in four weeks, as the announcement of a Greek referendum spurred concern that the country may default. U.S. futures and Asian shares retreated.

Credit Suisse Group AG (CSGN) plunged 8.6 percent, leading a selloff in lenders, after the Swiss bank reported earnings that missed analysts’ estimates. Danske Bank A/S slumped 7.1 percent after Denmark’s largest lender posted an unexpected loss. Mining companies tumbled after a gauge of Chinese manufacturing dropped to the lowest level since February 2009.

The Stoxx 600 slid 3 percent to 236.29 at 8:29 a.m. in London, extending yesterday’s 2.2 percent selloff. Futures contracts on the Standard & Poor’s 500 Index lost 1.8 percent and the MSCI Asia Pacific Index tumbled 2.1 percent.

“Pessimism over the outlook for resolving the European debt crisis continues to mount,” said Peter Stanhope, an institutional trader at IG Markets in Melbourne. “Greece has shocked markets with the announcement of a referendum. With more elements adding to uncertainty like this, it seems likely that the turbulent market conditions will prevail.”

U.S. stocks extended the selloff yesterday and Asian shares tumbled today after Greek Prime Minister George Papandreou called a referendum on the euro area’s latest bailout package, saying voters will give him support to proceed with economic reforms.

Papandreou’s gambit risks pushing the country into default if voters reject the financial accord. An opinion poll published on Oct. 29 showed most Greeks believe the euro area’s expanded bailout package and debt writedown are negative.......read on

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