European stocks fell to a three- month low as Greek Prime Minister George Papandreou said he will reshuffle his cabinet and seek a confidence vote. U.S. futures and Asian shares also dropped.
The benchmark Stoxx Europe 600 Index fell 0.7 percent to 265.99 as of 8:18 a.m. in London. The gauge has fallen 8.7 percent from this year’s high on Feb. 17 as a slowdown in U.S. job creation suggested the economic recovery may be faltering and speculation grew that Greece might default on its debt. The Euro Stoxx 50 Index slipped 0.9 percent to 2,706.26, the lowest level since November. Standard & Poor’s 500 Index futures fell 0.1 percent today, while the MSCI Asia Pacific Index slipped 2 percent.
“With Greek sovereign debt squarely back on the agenda, risk appetite amongst traders is very much off and equities are coming under sustained pressure as a result,” said Cameron Peacock, a market analyst at IG Markets in Melbourne. “A new government is set to be formed in Athens today against a backdrop of civil unrest and the big concern is that politics gets in the way of the second tranche of the bailout, in turn forcing a debt restructuring in the euro zone.”
Papandreou sought to reassert his authority in a televised address last night hours after police used tear gas to break up protests in central Athens and media reported he was in talks to step down in favor of a unity government. Thousands remained outside Parliament late into the evening, with police estimating the crowd at 8,000 people at 10:20 p.m. local time......read in full
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