Market worries remain despite Spanish banks deal

Published:  12 Jun at 2 PM

As borrowing costs for both Spain and Italy rose, concern remains over the eurozone debt crisis, even with the 100 billion-euro bailout of Spanish banks.

Yields for ten-year Italian bonds went up from 5.758 percent to end at 6.032%. Yields for Spanish bonds were also higher, to nearly 6.5 percent, In the meantime, ratings agency Fitch has slashed the credit ratings for two Spanish banks, BBVA and Santander, by two spots from A to BBB+.

After the Spanish bailout deal, stock markets around the world had opened higher. However, the initial enthusiasm faded later.
New York's Dow Jones, which opened up by 0.7%, finished lower by 1.1%. London's FTSE 100 opened strongly but ended down by 2.7 points. The German and French indexes were not changed by much.

The Nikkei in Tokyo finished up by 2.0%, while the Hong Kong Hang Seng closed up by 2.4%. Petroleum prices also dropped on fears that the EU debt crisis would engulf more nations and threaten market demand for oil. US light crude dropped by $1.40 to $82.70 a barrel, and Brent crude fell by $1.47 to end at $98 per barrel.