News / Economy

European Stocks Stall After Brief Rally

A European Union flag flies outside the stock exchange in Athens, Greece, May  2012.
A European Union flag flies outside the stock exchange in Athens, Greece, May 2012.
TEXT SIZE - +
VOA News
Stocks in Europe gave up their initial gains Monday, failing to continue a rally seen in Asia after pro-bailout parties won enough votes in Greece's parliamentary elections to form a government.

Greece's stock exchange surged more than 7 percent at one point, but lost much of its early gain. Elsewhere in Europe, fears about other struggling economies, especially Spain, erased early advances and stocks closed mixed. Major U.S. stock indexes closed mixed Monday.

Borrowing costs for the Madrid government soared to their highest point since Spain adopted use of the euro 13 years ago. The interest rate on Spanish debt topped 7 percent, the point at which Greece, Ireland and Portugal all were forced to secure international bailouts in the last two years.

Japan's Nikkei index finished the day up nearly 2 percent, and in Hong Kong, the Hang Seng gained 1 percent. Analysts, including Robert Halver at Baader Bank, cautioned that any rally could be short-lived because of the extent of the economic problems in Greece, now in its fifth year of recession.
 
"We will have, after a short euphoria, the same old crisis because no problem has been solved," he said. "It is still clear that the Greeks will not survive in the eurozone. No private investment will flow into Greece as the danger that Greece will leave the eurozone is still massive, [and] the yield prospects are very low, so Greece is still the focus of the euro crisis and of the financial markets."

Economist Juan Carlos Martinez of the IE Business School, said European leaders must hold to governmental austerity measures, but still promote economic growth.
 
"No matter how hard Spain tries, and no matter what happens in Greece, a part of the solution for Spain, for Italy, and for some other European countries, is a change on European policies," he said. "It is absolutely necessary to keep the austerity measures, especially in Spain, but it is also absolutely necessary to find some kind of levers or bonds that will allow to combine that austerity with the impulse for growth. Without growth it will be very hard for Spain, no matter what happens in Greece, to get out of the serious situation we are in."

The ongoing turmoil in the 17-nation euro currency bloc has affected markets outside of the continent.

In Afghanistan Sunday, the head of money exchangers in Kabul, Amin Jan Khosti, said traders were swapping euros for dollars to escape the fluctuating situation in Europe.

"Today when I was at the market, people mostly exchanged euro," he said. "They think if today's Greece's turn, maybe tomorrow is Spain and next it will be Portugal's. People think every day their budget deficit is getting deeper."

Khosti also said Afghan businessmen are worried that the euro's ups and downs will damage their trading. Afghans, he added, are already thinking about how the pullout of international troops in 2014 will affect the country's financial situation.

"Because it was Sunday in Europe and we couldn't check the value of the euro online, but when the news about Greece's election and opposition being ahead in the polls reached us, the Euro, which traded 1.26 to dollar, came down to 1.06," he said. "People were trying to exchange euro to dollar."

Some information for this report was provided by AP and Reuters.

You May Like

Multimedia Parents of Disaster Ferry Passengers Lash Out at Authorities

Twenty-nine bodies recovered from water but some 270 remain trapped on board More

War Legacy Haunts Vietnam, US Relations

US congressional delegation initiates $84 million Agent Orange cleanup project More

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine, Russia, United in Faith, Divided in Politicsi
X
Michael Eckels
April 19, 2014
There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Ukraine, Russia, United in Faith, Divided in Politics

There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid

World Currencies

EUR
USD
0.7217
JPY
USD
102.17
GBP
USD
0.5949
CAD
USD
1.1009
INR
USD
60.326

Rates may not be current.