Cyprus crisis sends stocks down
- Published: 19 Mar 2013 at 00.10
- Online news:
LONDON - Europe's main stock markets lost ground on Monday on news that Cyprus might tax bank deposits as part of a controversial international bailout.
In afternoon trade, London's benchmark FTSE 100 index of top companies had fallen by 0.56 percent to 6,453.31 points, Frankfurt's DAX 30 had shed 1.04 percent to 7,959.18 points and in Paris the CAC 40 had lost 1.12 percent to stand at 3,801.46.Asian equities also fell heavily in earlier trade, as the mooted plan by Cyprus to tax bank deposits raised fresh concerns the eurozone debt crisis could reignite.Elsewhere, Madrid's IBEX 35 shares index dived 2.21 percent and Milan's FTSE MIB sank 1.37 percent in value.In opening trade in the United States, the Dow Jones Industrial Average gave up 0.34 percent to 14,464.70 points, the broad-based S&P 500, which last week appeared poised to break its all time record, declined 0.65 percent to 1,550.50 points and tech-rich Nasdaq Composite Index lost 0.66 percent to 3,227.52.In foreign exchange activity, the European single currency plunged at one point to $1.2882 in Asian deals to the lowest point since December 10, 2012.The euro later stood at $1.2930, down from $1.3075 late on Friday in New York.Gold prices meanwhile rose to $1,599.50 an ounce on the London Bullion Market from $1,595.50 on Friday."If European policymakers were looking for a way to undermine the public trust that underpins the foundation of any banking system they could not have done a better job," said CMC Markets analyst Michael Hewson.Terms for a desperately-needed 10-billion-euro ($13 billion) bailout for Cyprus include a levy on all deposits in the island's banks.Deposits of more than 100,000 euros will be hit with a 9.9 percent charge, and 6.75 percent for anything below that threshold. The proposal must still be approved by parliament."The dawn raid on the previously sacrosanct savings of depositors will draw unwanted attention to the struggling peripheral banks throughout the eurozone," added analyst Mike McCudden at online brokerage Interactive Investor."The move has sent a warning shot across the region and threatens to undo much of the work done over the past year to restore investor confidence.He added: "The move has sent out entirely the wrong message to...
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