LONDON: European equities dived and the euro hit a new one-year dollar low on Tuesday, failing to win support after eurozone finance ministers agreed a 110-billion-euro (145-billion-dollar) Greek bailout.
In late morning deals, the London stock market slid 1.51 percent, Paris lost 2.04 percent and Frankfurt shed 1.36 percent. Elsewhere, Madrid tumbled 3.26 percent and Athens slumped by 3.71 percent.
In foreign exchange trade, the European single currency nosedived to 1.3088 dollars on Tuesday, plumbing the lowest level since April 28, 2009.
"Markets do not seem greatly impressed by the launch of the Greek rescue plan," said Unicredit analyst Marco Annunziata.
"The 110-billion-euro program... barely met expectations, without generating any positive surprise, and this probably helps explain the lukewarm reaction."
Over the weekend, eurozone finance chiefs approved an unprecedented three-year package of loans for Greece, struggling to shake off a crippling debt and deficit burden.
"The EU/IMF bailout of Greece provides enough funding for the next 12 months or so," said VTB Capital economist Neil MacKinnon.
"However, the ability and willingness to bail out another eurozone fiscal miscreant is politically difficult," he added, hinting at other fiscally-challenged nations like Ireland, Spain and Portugal.
Of the 110 billion euros (145 billion dollars) to be made available to Greece, the eurozone would provide 80 billion and the International Monetary Fund 30 billion.
And in a policy U-turn, the European Central Bank agreed to accept Greece's junk-rated government bonds as collateral for loans.
In return, the Greek Socialist government will have to impose harsh austerity measures, as it seeks to slash its public deficit from nearly 14.0 percent of output last year to less than 3.0 percent by the end of 2014.
"The ECB's decision to suspend minimum collateral requirements for Greek bonds helps alleviate an imminent banking crisis but the ECB might find they end up doing this for other 'club Med' bonds," added MacKinnon.
More @ http://economictimes.indiatimes.com/markets/global-markets/Europe-debt-fears-hit-markets-Euro-at-year-low-against-dollar/articleshow/5890251.cms
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Src: EConomictimes
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