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New leaders fail to calm investors

Monday, November 14, 2011 - 01:54

Nov. 14 - The appointments of technocratic leaders in euro zone debt hot spots Italy and Greece fail to assuage fears about the euro zone debt crisis. Hayley Platt reports.

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Demand for Italian bonds in a crucial sale was solid enough to lift European stocks and the euro from their lows on Monday But both remained in negative territory on concerns about the euro zone debt crisis. Financial markets generally greeted the appointments of technocratic leaders in two euro zone debt hot spots with cautious optimism. But the appointment of respected economists in Italy and Greece is not the same as actually taking action so investors sold off early gains in equities and the single currency. By mid-morning the Uk's FTSE 100, Germany's Dax and France's CAC were all down around one one percent. Traders in Paris and Frankfurt welcomed the relative calm. (SOUNDBITE) (French) LIONEL JARDIN, HEAD OF INSTITUTIONAL SALES AT ASSYA SAYING: "There may not be massive optimism, but at least there's less uncertainty. In Greece the government is in place, in Italy it is about to be formed by the Italian prime minister. So little by little uncertainty is being withdrawn from the market and the market likes it." (SOUNDBITE) (English) TRADER AT BAADER BANK, ROBERT HALVER, SAYING: "Italy with Mr.Monti has the chance to turn the corner, to get rid of the big debt problems and I hope -- and the financial markets are hopeful -- that Mr. Monti can (master) this big chance." But James Mackenzie, Reuters chief correspondent in Rome, says sustaining market confidence could prove difficult. SOUNDBITE (Italian) REUTERS CHIEF CORESPONDENT JAMES MACKENZIE SAYING: "There will be a more important test in the days to come when we see how this new government gets about its business whether they have trouble forming a majority whether they come up with a policy programme that politics can support. " One of the biggest losers of the day was UniCredit. Shares fell more than two percent as Italy's largest bank prepared for a 10 billion dollar rights issue and announced plans to cut 5,000 jobs. Hayley Platt, Reuters.

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New leaders fail to calm investors

Monday, November 14, 2011 - 01:54