The Safety Net Of Europe - LOL

10th July 2014

Going well then?

Stock markets are taking a pounding due to fears over the global economic recovery and a crisis of confidence at Portugal's largest bank.

Weak economic data from Italy and mounting concern about the future of Banco Espirito Santo drove the sell-off, spreading from southern euro nations and across Europe to the United States.

Portugal's PSI was almost 4.5% down by early afternoon trading - with banking stocks worst affected as allegations surfaced that Banco Espirito Santo's parent firm covered up a €1.3bn (£1bn) hole in its accounts.

The Italian MIB and IBEX in Spain had both lost more than 2% - with the DAX in Germany and French CAC shedding 1.5%.

The rush for safe havens, and gold in particular, was also seen in London - the FTSE 100 losing just shy of 1% after bleeding value each day over the course of the week amid fears of a looming correction.

The problems in Portugal were blamed on shares and bonds of Espirito Santo Financial Group, the chief shareholder in Banco Espirito Santo, being suspended over "material difficulties" at the parent firm.

It was reported earlier by the Portuguese newspaper Diaro Economico that Espirito Santo FG was considering filing for controlled insolvency if debt renegotiations with clients failed.

Banco Espirito Santo shares dived more than 17% at one stage despite government assurances the bank was solid.


http://news.sky.com/story/1298559/recovery-fears-return-to-world-stock-markets