Business | Markets
Portugal, Greek woes weigh on world stocks
World stocks fell from a five-and-a-half month high on Friday
- Reuters
- Published: 00:00 January 28, 2012
London: World stocks fell from a five-and-a-half month high on Friday as gains spurred by the Federal Reserve's pledge of low interest rates gave way to concerns about Portugal, seen as the next domino in the Eurozone crisis, and uncertainty over Greek debt talks.
Portuguese five- and 10-year government bond yields remained under pressure after hitting euro-era highs on Thursday as fears grow that the country may follow Greece in requiring another bailout or seeking to restructure its debt.
"With all the focus on Greece, attention has also started to shift to Portugal, whose own bond yields are continuing to rise sharply, with 10-year yields pushing on towards 15 per cent, as fears rise that it could well need a second bailout," said Michael Hewson, market analyst at CMC Markets in London.
The MSCI world equity index fell a quarter per cent, after hitting its highest since August on Thursday after the Federal Reserve pledged to keep interest rates near zero for the next three years.
European stocks lost 0.4 per cent while emerging stocks rose 0.3 per cent.
US crude oil fell 0.1 per cent to $99.56 a barrel.
Bund futures rose 30 ticks.
The dollar rose slightly against a basket of major currencies. The euro fell 0.1 per cent to $1.3091.
Eurozone members may have to increase their financial support for Greece if Athens and the private sector do their part to address the country's debt crisis, Eurogroup head Jean-Claude Juncker told a newspaper.
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