Don’t look now, but Wall Street’s nagging eurozone headache is back. After 6 weeks of uncharacteristic calm and soaring stock prices, eurozone jitters re-emerged on Friday, sparking a rare triple-digit selloff on the Dow and setting off a spike in volatility
The culprit? Greece, as quoted by foxbusiness.com, which has incredibly been a thorn in the global market’s side for almost two years now.
“Investors quit thinking about Europe. It was a risk-on environment again for eight weeks, but now we’re kind of at a standstill,” said Stuart Freeman, chief equity strategist at Wells Fargo Advisors. “A lot of investors think this market may have moved a little ahead of itself.”
Investors’ risk appetite was stunted by the news overnight that the latest bailout of Greece may not be in the bag after all.
Reports that political turmoil in Athens could collapse a $172 billion rescue from the International Monetary Fund and European Union helped send the blue chips sinking as much as 145 points on Friday -- the largest intraday decline since January 13. If the benchmark index closes with a triple-digit loss, it would be its first for all of 2012, which started very strong thanks to bullish economic data and easing tensions in Europe.
So far this year, the largest one-day decline at the close has been just 74.2 points, which happened on January 27. Remarkably, prior to Friday, 20 of the 27 trading days this year saw the S&P 500 move less than 0.5% in either direction, according to Dan Greenhaus, chief global strategist at BTIG.
In a further sign of the rising concern, the VIX, which helps gauge market fear, soared as much as 11% Friday morning. While this measure remains at subdued levels compared with last year, Friday’s outburst still marks its biggest one-day increase in three months.
Likewise, the cost to insure the sovereign debt of a number of embattled eurozone countries climbed on Friday.
According to Markit, the cost to insure $10 million of Italian bonds jumped 7.1% to $392,000, while the cost to insure Spanish debt climbed 5.2% to $364,000.
The fear is that if Greece’s political parties fail to reach a deal on highly unpopular austerity measures, the IMF won’t release the latest tranche of bailout funds, triggering a disorderly default on March 20.How about Indonesia stock market today? Bisnis Indonesia provides recommendations:
Jakarta Composite Index (JCI) today may continue its drop as the lowest level broke 3,950 from the triangle pattern. The index is approaching support level of 3,893.
It is better for investor to take wait and see position until rebound pattern emerges. ADRO, ANTM, BBNI, INDF, and ITMG may furter lower.
Today, the JCI may move within the range of 3,857-3,948. Technically, the index may retreat and break support uptrend level.
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