Business, Economics and Jobs

Global shares tumble as fresh euro zone worries trigger flight to safety


Traders work on the floor of the New York Stock Exchange on May 29, 2012.


Mario Tama

Equity trading screens around the world were awash in red today as rising fears over the health of Spanish banks and the latest poll in Greece showing growing support for an anti-bailout party triggered a flight to safety.

The yield on 10-year Treasury bonds, which are perceived as a safer investment during periods of economic uncertainty, dropped to the lowest level in six decades as investors dumped shares in the United States, Europe and Asia, Reuters reported.

US stocks were down more than one percent in afternoon trading after European markets closed down as much as 2.24 percent, according to the New York Times.

Asian shares also retreated, though the losses were not as severe, on diminishing hopes for a major Chinese government stimulus package.

Spanish borrowing costs climbed closer to seven percent, the highest level since last November, after the European Central Bank released data showing deposits in Spanish banks had fallen to the lowest level since the euro zone crisis began, fueling fears of a bank run, the Wall Street Journal said.

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Italian bond yields also rose as the euro fell to the lowest level in 23 months against the dollar, Reuters reported.

Investors were also rattled by the latest Greek poll showing the anti-austerity leftist Syriza party has regained the lead ahead of elections next month that are seen as crucial to Greece’s future in the euro zone, according to the Associated Press.

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