Greek instability latest in run of bad news, markets still looking sickly

A Greek gamble joined the ever-pesky plunging oil yesterday to cause more havoc on the global markets; whilst today has seen the indices recover slightly, the weight of economic woes on the world stage is still causing bearish sentiment.

Disappointing CPI and PPI from China, alongside Japanese BSI manufacturing figures 5 points lower than forecast at 8.1 and weak consumer confidence meant that the Nikkei continued its election-week run of losses. The index opened at 17589.5 and closed at 17452.5; the only good news for Japan was that the worldwide malaise caused the dollar to slip against the yen as well, falling back down to 119 after its highs at the end of last week.

The biggest indicator of global economic sentiment comes in the form of a regressing Dow Jones. After inching within a hair’s breadth of the 18000 mark, the Dow has been unable to cling onto its record highs in the face of a new deluge of bad world news. Whilst the US index managed to claw back much of its losses yesterday, it still closed lower at 17792.5. This is the first time the Dow has fallen for two days in a row in two months, as volatility in Greece ensured the Dow couldn’t escape the albatross around the global market’s neck that is the Eurozone.

Perhaps unsurprisingly, the renewed focus on Greek instability, as well as more dismal data from France’s industrial sector, saw the DAX one of the few indices to open this morning higher than yesterday’s close at 9883.8. Whilst only a marginal increase, the usual rules seem to apply here; more chaos in the Eurozone means increased likelihood of QE which means some kind of hopeful sentiment creeps into the DAX et al for a brief time. However, as we have seen, these bullish runs are more often than not predicated on fumes of QE-implementation rather than anything concrete, leaving the legitimacy of any bullish Eurozone sentiment in question.

Finally, the FTSE was not immune to the world’s problems, opening marginally lower than Tuesday’s close at 6549. The UK index has spent much of the morning after the bell flat, as world news continued to weigh on the markets. However, much like yesterday’s awful production figures, the UK is more than capable of producing its own negative news, with the British Chambers of Commerce claiming that a premature raise of interest rates would be potentially disastrous for the UK economy. This claim came after the BCC downgraded the UK’s growth forecast from 3.2% to 3%. In another quiet day for economic announcements, news like this will have time to fester, and may lead to another daily struggle for the FTSE.