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More market turmoil over euro zone debt

posted 13 Sep 2011, 05:23 by Mpelembe Admin   [ updated 13 Sep 2011, 05:31 ]
Another choppy day for European stocks and the euro after a report casts doubt on the idea China would provide financial support to Italy, leaving investors focused on the growing risks from euro zone debt.

EUROPE-MARKETS - Fears of a Greek default continue to hit markets.

France's CAC and Germany's DAX were already at two year lows - both fell again before gaining ground around midday.


Reports that Italy may get financial support from China sparked a brief revival early on but it didn't last.

Investors say it isn't a long-term solution to the euro zone debt crisis.

Robert Halver is from Baader Bank.


ROBERT HALVER FROM BAADER BANK AG, SAYING:

"China is willing to buy Italian bonds. It's a clear message to Brussels and Berlin because they made clear that Italy is still a member of the eurozone. They're not willing to buy Greek bonds, that's why we should make clear, Greece is not a member of the eurozone, in a thousand year not."

French banks again took a hammering over their exposure to Greece.

BNP Paribas shares dropped another 10 percent before recovering.

The CAC, DAX, and the UK's FTSE 100 were starting to recover in early afternoon trade.

As was the FTSEurofirst 300 - the index of top European shares. It's lost 21 percent of its value this year.

Lionel Jardin is from Global Equities in Paris.


 HEAD OF INSTITUTIONAL SALES AT GLOBAL EQUITIES, LIONEL JARDIN, SAYING:

"As of Monday, the question of abandoning Greece is no longer a taboo. But, the problem is how to make it happen. There's no plan in the Maastricht Treaty of Europe to let Greece go. We just wouldn't know how to do it."

While the decline has made shares look cheap analsysts say the wider picture is just too gloomy to revive investors confidence.

Sonia Legg, Reuters.


HEAD OF INSTITUTIONAL SALES AT GLOBAL EQUITIES, LIONEL JARDIN, SAYING:

"How to do it, if it has to be done. It's true there is this risk. There are very many scenarios about moratoria on debt, the idea of making a two-speed euro with the good and the bad students, all the scenarios are in the market and it's that instability and uncertainty that's weighing enormously on the euro."


ROBERT HALVER FROM BAADER BANK AG, SAYING:

"China is willing to buy Italian bonds. It's a clear message to Brussels and Berlin because they made clear that Italy is still a member of the eurozone. They're not willing to buy Greek bonds, that's why we should make clear, Greece is not a member of the eurozone, in a thousand year not."


ROBERT HALVER FROM BAADER BANK AG, SAYING:

"I guess reality is dawning in Berlin, even in the ruling coalition, that Greece cannot be a member of the eurozone any longer. That's why, let's send them out, please. Because it's good for them and for us."

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