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Markets fall after record highs

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Markets fall after record highs


European markets have fallen in early trading after yesterday´s bumper highs in the wake of the massive bailout to protect the single currency.

The size of the 750 billion euro emergency package stunned world markets.

But, many investors believe the reality of the deal is only just sinking in now.

Head of Research at Baader Bank Robert Halver said: “Today is judgement day. Many people and investors are thinking about the future of the common currency and I guess we are losing stability criteria. That’s not good for the euro currency in the short term.”

Many analysts remain concerned that with such low growth rates in the eurozone the stability pact will only be a temporary measure.

Montsegur Finace Associate Director Francois Chaulet: “The Euro remains a currency that’s expensive in terms of dollars, despite its recent fall, in view of the significant discrepancy between the growth at the moment of the European zone, which is seeing moderate growth, and the United States, which has found itself in strong growth.”

A drop on the markets was always on the cards after Monday´s record gains. But, many traders remain unsure how eurozone countries will be able to reduce their ballooning budget deficits.

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