Stocks fall globally as Greek talks collapse
Monday, 15 June 2015
Stock markets around the world fell Monday, suffering their first bout of significant contagion from the Greek crisis after 11th hour talks between the near bankrupt country and its creditors collapsed. The losses were broad across risk assets. Major stock indexes fell sharply, as did crude oil prices, while the euro weakened against the dollar. Gold and silver rose on the day. Talks on Sunday between Greece and its creditors - described as a last attempt to bridge their differences - broke up after less than an hour. European Union officials said Athens had offered no new concessions to secure the funding it needs, while Athens said it would not give in to demands for more pension and wage cuts. Greece must repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund by mid-year. The MSCI International ACWI Price Index .MIWD00000PUS fell 0.9 per cent while the pan-European FTSEurofirst 300 .FTEU3 lost 1.4 per cent, pressured by losses in bank stocks. The Hang Seng index .HSI of top shares in Hong Kong fell 1.5 per cent.
The Dow Jones industrial average .DJI fell 164.05 points, or 0.92 per cent, to 17,734.79, the S&P 500 .SPX lost 16.38 points, or 0.78 per cent, to 2,077.73 and the Nasdaq Composite .IXIC dropped 50.20 points, or 0.99 per cent, to 5,000.90.
The CBOE Volatility index .VIX, a measure of US investor anxiety, rose 10.5 per cent, while a gauge of European stock market volatility .V2TX popped 10.7 per cent and hit its highest since January.
The benchmark 10-year US Treasury note rose 14/32 in price, pushing the yield down to 2.3307 per cent.
In the currency market, the euro fell against the US dollar, down 0.3 per cent to $1.1240, recovering from a low of $1.1188. The US dollar index .DXY, which measures the greenback against a basket of currencies, rose 0.15 per cent. The yen moved less than 0.1 per cent against the dollar.
Investors are also looking ahead to a meeting of the US Federal Reserve, which will issue a statement after the two-day meeting ends on Wednesday. Strong US data last week has reinforced expectations that the central bank is on track to raise rates, possibly as soon as September. Investors will focus on any changes in Fed Chair Janet Yellen's language in a post-meeting news conference.
US crude futures CLc1 fell 0.9 per cent to $59.46 per barrel while Brent LCOc1 lost 1.8 per cent to $62.74. Gold rose 0.2 per cent on the day while silver rose 0.8 per cent. Copper CMCU3 sank 1.6 per cent, according to a news agency.