Kenya shrugs off global securities worries over Greek Eurozone exit
What you need to know:
- For the past six months, Greece has been negotiating with the European Union and the International Monetary Fund on debt repayment and a set of austerity measures to help Athens turn around its economy.
- “Default appears inevitable and there is a growing risk of Greece lurching out of the single currency, a development that has seen investors favour the dollar over the euro.”
- The broad-based S&P 500 fell 0.57 per cent while the tech-rich Nasdaq Composite Index dropped 0.69 per cent.
Kenya Monday brushed off worries of a global securities meltdown triggered by a growing fear that Greece could default Tuesday and eventually exit the Eurozone.
The NSE 20 Share index edged up 0.57 per cent, with the shilling remaining within the range despite earlier fears that the two would tumble.
“The weakness (experienced Monday morning) was as a consequence of the weakness in the euro, which has come under pressure from dollar strength over the Greek debt crisis,” an analyst at a commercial bank said anonymously.
“Default appears inevitable and there is a growing risk of Greece lurching out of the single currency, a development that has seen investors favour the dollar over the euro.”
For the past six months, Greece has been negotiating with the European Union and the International Monetary Fund on debt repayment and a set of austerity measures to help Athens turn around its economy.
The talks collapsed over the weekend, triggering a meltdown on the first day of trading yesterday. Global stocks fell, with Frankfurt and Paris losing more than three per cent after a slump in Asia, as investors feared a ‘Grexit’.
SHUT
The Athens stock market has, meanwhile, been shut until July 7, when a referendum on the issue is expected to be taken.
Shanghai saw a 10 per cent swing from gains to losses, extending a painful sell-off since hitting a June 12 peak.
A weekend central bank interest rate cut was unable to offset profit-taking and the effects of a tightening of trading rules.
Tokyo ended down 2.88 per cent, Sydney shed 2.33 per cent, and Seoul was 1.42 per cent off.
Hong Kong tumbled 3.63 per cent at one point before ending down 2.61 per cent, or 696.89 points, at 25,966.98.
Stock market in US also opened on the negative territory with the Dow Jones Industrial Average dropping 0.60 per cent in the first 20 minutes in to trading.
The broad-based S&P 500 fell 0.57 per cent while the tech-rich Nasdaq Composite Index dropped 0.69 per cent.
“I’m not confident that today reflects all the bad news that could happen. Investors are really bumping up the odds that Greece will exit the euro,” Mr Leo Grohowski, chief investment officer at BNY Mellon Wealth Management, told Reuters
This, as Greece shut its banks and imposed capital controls to halt a panic-driven run on ATMs, a day before Athens risked defaulting and possibly crashing out of the euro.
