Just ahead of Germany’s day in court over the legality of that country’s part in Greece’s bailout effort, European stocks fell to the lowest point in two years. Confidence is at surprisingly low levels and the FTSEurofirst 300 fell to 904.07 points which was down .7%. This is the lowest level it has been since July of 2009 and fuelling fears of another global meltdown.
On the other side of the ocean, American markets also lost precious ground after reopening after the Labor Day long weekend. Both the Naskaq and Dow were down, losing 1.1% and 1.5% in late day trading. Then back on the Continent, there are fresh concerns with French banks that are holding billions of euros in the form of sovereign bonds. Two of France’s top banks lost 6.3% and 5.2% which is further indication of the growing concern in the Eurozone.
It is reported that worries are at fever pitch over the ability of European leaders to pull it together to resolve the debt crisis that is looming ahead. Investors are concerned that leaders will not be able to stop the move towards recession and amidst all this, Germany is battling the legality of bailing out Ireland, Greece and Portugal.
Analysts don’t believe that Germany’s courts will rule contributions to date, but the court could very likely put conditions and/or terms on future contributions. This would significantly impact the market’s reaction to a region that is already on shaky ground with low levels of confidence in the rescue effort.
One the brighter side, if there is one amidst all this turmoil, London’s FTSE 100 rose 1.1% and is now up to 5156.84. This is seen as a backing of sorts to the Chancellors contention that the UK is a safe haven for traders that are lacking confidence elsewhere.
