14 May 2012: Stocks slide on Greece fears, Indian inflation rises

  • Stocks slide again on Greek worries despite China’s positivity: Worries over Greece’s possibility of leaving the Euro has counteracted the news of monetary easing in China.
  • Stocks: FTSE All World is down 0.9% to a 4-month trough as FTSE Eurofirst suffers a massive 2% loss; In Asia, FTSE Asia Pacific lost 0.7% Tokyo lost a staggering 1.78%; S&P 500 futures point to a fall of 0.9% later in the day; FTSE 100 lost over 2% today and is at 5458
  • Currencies: Euro is almost at a 4-month low against Dollar at $1.2865
  • Debt: Spain’s borrowing costs are at historical high at 6.20% as German Bunds fall to a low of 1.45% for the first time; US 10-years are down 5bp to 1.79%
  • Commodities: Brent Crude lost over 1% to $110.91/barrel; Copper crashes 2.5% to $3.56/pound; Gold loses 1% at $1577/ounce
  • India’s inflation climbs higher: India’s hopes of cutting rates were dealt a blow as the inflation climbed higher. The wholesale price index rose 7.23% higher in April YoY mainly due to higher food prices, and rising manufacturing costs. The cut of repo rate, however, by the RBI (last month) was applauded by industrialists as it eased the lending rates slightly. However, any further cuts look highly unlikely after these inflation figures.
  • Fears grow of Greece leaving Euro: Eurozone central bankers, for the first time, have publicly talked about the possibility of managing Greece’s exit from Euro as a stalemate in the political issues has raised fears of Greece going back on its promise of the bailout. Almost all eurozone bankers have described this to be an unattractive, but a realistic scenario. While the consequences of this exit would be the worst for Greece, a lot of economic damage will be caused all over the Eurozone.
  • Yahoo! replaces CEO: Yahoo! has replaced their CEO, as the previous chief quit, 10 days after it was revealed that he did not have one of the qualifications listed on his CV.

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