Stocks in Asia, Europe and North America are falling as contagion from the Greek debt crisis continues to impact markets worldwide. Until there is some resolution, investors should expect this to continue along with intermittent sharp moves up thanks to central bank liquidity injections.
Trouble began in Asia last night with the Hang Seng in Hong Kong falling 537 points, or 2.8%. It closed at 18,918, well below the critical 20,000 support level. The Indian Sensex was down 188 points, or 1.1%, to 16,745. It has been leading Asian markets down and is trading on top of a very large gap made in May 2009. The Nikkei in Japan managed to buck the trend and close up 195 points to 8,864 or 2.3%. It has been mostly trading below key support at 10,000 since March when the Tohoku earthquake struck. All three markets are in a technically bearish trading pattern.
No part of the globe can escape what is happening in Europe. EU finance ministers said Friday they would delay authorizing a new installment of emergency funds for Greece until October. Greece still is on its first 110 billion euro bailout, but the final payments have yet to be made. A second bailout has yet to be fully approved, although the terms have been set. Greece’s fiscal situation continues to deteriorate rapidly despite all the funding it has received from the EU and the IMF. The bailout money is life support for Greece. If the plug is pulled, the patient defaults. Read