Thursday, July 28, 2011

Investors lose patience with US debt standoff

Neil Dennis

Global markets continued to send the signal to US senators that the political standoff over the country’s debt ceiling is hurting, while disappointing earnings in Europe added to the gloom.
Stocks in Europe were lower for a fourth-consecutive session on Thursday, while Asian stocks fell sharply following the losses seen overnight on Wall Street, where investors voted with their feet over the failure of Congress to resolve the US debt issue.
Meanwhile, yields on Italian bonds pushed higher, with the 10-year note yielding close to 6 per cent after the latest debt auction. Rome sold nearly €8bn in three-, four- and 10-year bonds, and although the total amount raised was at the top end of expectations, yields paid were higher than at previous auctions and the bid to cover ratio was on the low side.
By early afternoon in London, the FTSE Eurofirst 300 was down 0.8 per cent at 1,079.94. In Germany, sharp losses for BASF and Siemens dragged the Xetra Dax index down 1.8 per cent to 7,126.11.

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