Eurozone crisis drives stocks lower despite Facebook frenzy

World stock markets fell again in nervous trade on Friday and the euro hit a new four-month low against the dollar as ratings agencies further downgraded Greek and Spanish banks.

Spooked investors showed little faith that the Group of Eight weekend summit in the United States would produce any quick or convincing action that could quell the turmoil in the eurozone.

Even the much-awaited largest-ever tech company IPO, Facebook, could not reverse sentiment and very nearly turned into a money-losing flop itself, with underwriters forced to prop the shares up above the $38 initial public subscription price.

"There is little respite in the eurozone banking crisis which is having spillover effects on the global economy and global financial markets," said VTB Capital economist Neil MacKinnon.

"Investors are worried about deposit-runs in the eurozone banking system and the 'flight of capital' is pushing US, UK and German bond yields lower."

"Market confidence continued to erode this week due to events in Europe, including capital flight from Greece and the downgrade of several Spanish banks," said Economists Paul Edelstein and Nigel Gault at IHS Global Insight.

"The big question is: will Greece exit (or be jettisoned from) the rurozone? Even if Greece elects a 'pro-bailout' government in June and even if Germany blinks first in the austerity/growth game of chicken, a Greek exit appears likely," they said.

That cloud sent shares tumbling and the dollar pushing higher against the euro.

In New York the S&P 500 gave up 0.74 percent for the day, bringing its loss for the week to 5.3 percent. The Dow index of blue chips lost 0.59 percent, and 3.5 percent for the week.

In Europe London's FTSE 100 index of top companies lost 1.33 percent; Frankfurt's DAX 30 0.60 percent, and the CAC 40 in Paris, 0.13 percent.

Madrid's IBEX-35 index was up 0.44 percent however and embattled Bankia shares surged as the financial sector staged a dramatic recovery despite Moody's downgrade of 16 banks late Thursday.

Meanwhile the European single currency tumbled as low as $1.2642 to reach a level last seen on January 16, before rebounding to $1.2773.

The dollar dipped to 78.95 Japanese yen from 79.28 yen.

Earlier in the day, under the same shadows of slower economic growth and the eurozone crisis, stocks in Asia were weak.

The Tokyo market ended with a fall of 2.99 percent on the Nikkei 225 index. Sydney dived 2.67 percent, while Hong Kong lost 1.30 percent and Shanghai was 1.44 percent lower.

"Fears that Greece could collapse at any moment, downgrades for Spanish banks, reports of runs on one or two banks in those countries... It could well be a tough few days at the G8," said analyst Mike Mason at Sucden Financial Private Clients.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Philippine, Vietnam troops play sports on disputed island
    Philippine, Vietnam troops play sports on disputed island

    Filipino and Vietnamese troops played football and tug-of-war on a disputed South China Sea island on Wednesday, officials said, closing ranks as their rival China ramps up construction of artificial islands. The games took place on Philippine-held Northeast Cay, just 2.7 kilometres (1.7 miles) from Southwest Cay which is controlled by Vietnam, where a similar contest was held last year. "It was a navy-to-navy confidence-building engagement," Vice Admiral Alexander Lopez, the Philippine …

  • ‘Inland areas could be exposed to tsunami-like waves’
    ‘Inland areas could be exposed to tsunami-like waves’

    While strong earthquakes cause tsunamis in coastal areas, the Philippine Institute of Volcanology and Seismology (Phivolcs) warned that inland areas could also be exposed to tsunami-like waves, or seiche, if located near or around bodies of water. In a recent earthquake awareness seminar in Muntinlupa, Phivolcs supervising science research specialist Joan Salcedo explained that a seiche is a large wave similar to a tsunami, triggered by strong ground shaking from an earthquake or volcanic …

  • China gives ‘gentle reminder’ to Phl, warns small nations
    China gives ‘gentle reminder’ to Phl, warns small nations

    China gave the Philippines a “gentle reminder” last Tuesday that Beijing will not bully small countries but warned these nations not to make trouble willfully and endlessly. “Here is a gentle reminder to the Philippines: China will not bully small countries, meanwhile, small countries shall not make trouble willfully and endlessly. The Chinese Foreign Ministry also said that China would continue to build other civilian facilities on relevant maritime features in the disputed Spratly Islands …

  • Back-channel diplomacy pushed for Phl-China dispute
    Back-channel diplomacy pushed for Phl-China dispute

    The Philippines should consider backchannel diplomacy to prevent its territorial dispute with China from deteriorating further, Sen. Ferdinand Marcos Jr. said yesterday. There are a lot of Filipino businessmen with businesses in China and they have friends and connections there. Let’s utilize that, ask them to talk to their friends on how we can resolve this matter peacefully,” Marcos said. …

  • Phl, Japan to deepen ties amid China sea claims
    Phl, Japan to deepen ties amid China sea claims

    Japan and the Philippines are set to bolster security ties when President Benigno Aquino visits Tokyo next week, the latest move by Prime Minister Shinzo Abe to beef up cooperation with Southeast Asian nations facing China’s growing naval ambitions. The two sides will likely agree to start talks on a framework for the transfer of defense equipment and technology and to discuss a possible pact on the status of Japanese military personnel visiting the Philippines to facilitate joint training and …

  • Phl, Vietnam troops play soccer on disputed isle
    Phl, Vietnam troops play soccer on disputed isle

    Vietnamese and Philippine troops played soccer and sang karaoke on a South China Sea island yesterday in a sign of the growing security ties between the two Southeast Asian nations most at odds with Beijing over the contested waterway. Cooperation has blossomed between Hanoi and Manila since they shelved decades of enmity over their competing claims in the Spratly archipelago to try to counter China, whose creation of artificial islands in the region will allow it to project power deep into …

  • Noy swears in 50 newly appointed AFP officers
    Noy swears in 50 newly appointed AFP officers

    President Aquino administered yesterday the oath taking of 50 newly appointed generals and officers of the Armed Forces of the Philippines (AFP) in a simple ceremony at the Rizal Hall of Malacañang Palace. …

  • Taiwan’s peace call on claimants of disputed territories welcomed
    Taiwan’s peace call on claimants of disputed territories welcomed

    The US on Tuesday welcomed Taiwan’s call on all claimants to disputed shoals, reefs, rocks and islets in the South China Sea and West Philippine Sea to exercise restraint, refrain from unilateral actions that could escalate tensions, as well as to respect international law as reflected in the United Nations Convention on the Law of the Sea. “With regard to the maritime claims and the claims to sovereignty over land features in the South China Sea, our position is that maritime claims must …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options