Stocks drop in Greece; debt is downgraded to 'junk'
By Pan Pylas, AP Business Writer LONDON —
Greece's debt has been downgraded to junk status by Standard & Poor's as fears mount that the debt crisis in Europe could spiral out of control. In a statement Tuesday, S&P said it is lowering its rating on Greece's debt to BB+ from BBB- — meaning that the country's debt no longer is considered investment grade.
The agency is also warning debtholders that they only have an average chance of 30% to 50% of getting their money back in the event of a debt restructuring or default.
LATEST WORLD MARKETS: See most recent indexes The Greece downgrade follows an earlier one for Portugal and comes at the end of another bad day for the eurozone.
Greek shares led a European stock market retreat of 1% to 4% Tuesday as concern grew about the country's ability to tap a bailout facility. .
In Greece and Portugal— the Athens composite main index plunged 5.2% to 1,711.70 while Lisbon's main PSI 20 index slid 2.5% to 7,367.71.
Once again, the Greek debt crisis had investors' attention despite last week's request by the Greek government to tap a rescue package from its 15 partners in the eurozone and the International Monetary Fund.
With German Chancellor Angela Merkel pursuing a hardline stance towards the release of the money — Germany's share is euro8.4 billion — ahead of a May 9 election in North Rhine/Westphalia, Greek borrowing continues to carry sky-high interest rates.
"The situation in the Greek financial market has descended into chaos," said Jeremy Batstone-Carr, head of private client research at stockbrokers Charles Stanley.
"Investors hate delay during times of crisis...two weeks or more is a long time to wait in times of crisis," he added.
Greece has to make its next batch of debt repayments May 19 — whether it gets the money in time is now in question.
"Greece has a funding requirement of just under euro10 billion for May, so there is very little time for a stand-off on the issue," said Jane Foley, research director at Forex.com.
Even if it does receive the bailout in time,...
Read entire article
By Pan Pylas, AP Business Writer LONDON —
Greece's debt has been downgraded to junk status by Standard & Poor's as fears mount that the debt crisis in Europe could spiral out of control. In a statement Tuesday, S&P said it is lowering its rating on Greece's debt to BB+ from BBB- — meaning that the country's debt no longer is considered investment grade.
The agency is also warning debtholders that they only have an average chance of 30% to 50% of getting their money back in the event of a debt restructuring or default.
LATEST WORLD MARKETS: See most recent indexes The Greece downgrade follows an earlier one for Portugal and comes at the end of another bad day for the eurozone.
Greek shares led a European stock market retreat of 1% to 4% Tuesday as concern grew about the country's ability to tap a bailout facility. .
In Greece and Portugal— the Athens composite main index plunged 5.2% to 1,711.70 while Lisbon's main PSI 20 index slid 2.5% to 7,367.71.
Once again, the Greek debt crisis had investors' attention despite last week's request by the Greek government to tap a rescue package from its 15 partners in the eurozone and the International Monetary Fund.
With German Chancellor Angela Merkel pursuing a hardline stance towards the release of the money — Germany's share is euro8.4 billion — ahead of a May 9 election in North Rhine/Westphalia, Greek borrowing continues to carry sky-high interest rates.
"The situation in the Greek financial market has descended into chaos," said Jeremy Batstone-Carr, head of private client research at stockbrokers Charles Stanley.
"Investors hate delay during times of crisis...two weeks or more is a long time to wait in times of crisis," he added.
Greece has to make its next batch of debt repayments May 19 — whether it gets the money in time is now in question.
"Greece has a funding requirement of just under euro10 billion for May, so there is very little time for a stand-off on the issue," said Jane Foley, research director at Forex.com.
Even if it does receive the bailout in time,...
Read entire article
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