6 Feb 2012: Greece closer to default

INDICES POINTS CHANGE
FTSE 100 5886 Down 25bp
S&P 500 1344 Up 146bp
NIFTY 50 India 5361 Up 67bp

Major Stories

  • Greece moves closer to default
    • Greek PM has been unable to convince party leaders to accept harsh austerity measures in return for the Euro 130bn bailout
    • PM has set a deadline of Monday mid-day for the party leaders to ‘agree’ on these in principle before they meet again
    • The Centre-right leader in Greece says ‘the lenders are asking for more recession than Greece can take’; lenders’ patience has steadily been running out with the Greek politicians
    • This fear of default has laid risk for the ‘contagion’ to spread to Portugal and Italy
    • Despite Private Investors ‘helping’ out by taking upto 70% losses on their holding of the Greek debt, Greece are unwilling to accept the spending cuts that Eurozone requires of them
  • Beijing bans airlines from EU tax plan
    • China has banned its airlines from complying with EU carbon emission tax, which could spark a trade war
    • Chinese airlines had previously said they would not pay this tax, but Beijing’s official ruling puts it in direct opposition to Brussels
    • In principle, this tax-scheme was meant to be implemented from 1st January, but Brussels has not started charging anyone yet
    • China has urged EU ‘to come up with a more practical solution for both the sides’
  • Mitsubishi to end production in Europe
    • Mitsubishi motors will stop making cars in Europe at the end of this year, but they will continue to ship cars to Europe from Thailand and Japan
    • Cars demand in Europe has been steadily decreasing since 2007; PwC estimate the orders/deliveries to go down to 13 million this year
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