TORONTO — The Toronto stock market was slightly higher at the open amid rising gold stocks and economic concerns.
The S&P/TSX composite index rose 27.33 points to 12,885.82 while the Canadian dollar inched up 0.02 of a cent to 97.45 cents US.
True that the recent UK credit downgrade attracted a lot of attention, however as some analysts pointed out, it did not reveal anything new. We all know UK growth is flat-lining and the Government’s austerity measures are failing to translate into deficit reduction. The Eurozone faces an even greater challenge as the economic fortunes of member countries diverge.
Indeed, there are many factors which suggest that a loosening of ties with the Eurozone by British businesses is possible, if not already under way.
Strong messages from the head or the IMF, the head of Deutsche Bank, and the president of the Bundesbank are highly likely to drive Greek voters away from New Democracy and Pasok in the June 17 elections.
The Guardian writes It's payback time: don't expect sympathy – Lagarde to Greeks.
Moody's has threatened to cut Italy's credit ratings on concerns over a possible rise in eurozone interest rates may derail the country's fragile economic recovery, raising more fears of contagion from the Greek debt crisis.
By Frederic Ruffy: Sentiment Market action has turned mixed late-Tuesday. Global equity markets showed unenthusiastic reaction to news Greece has secured a second bailout. In fact, Greek stock market averages slipped and fell 4 percent Tuesday. However, the euro has been displaying strength this week and was recently near 1.323 against the buck. Stability in the Eurozone currency possibly helped ease some of the recent anxiety about the debt crisis.
Ireland, facing a humiliating bailout, will unveil another harsh budget Tuesday -- on top of some 6.0 billion euros (8.0 billion dollars) of painful tax hikes and spending cuts already flagged to stabilise its crippled public finances.Finance Minister Brian Lenihan will address the Dail, or lower house of parliament, at 1545 GMT, amid intense anxiety on international financial markets over the fast-moving eurozone debt and deficit crisis.
By Simon Johnson
Most experienced watchers of the eurozone are expecting another serious crisis to break out in early 2011. This projected crisis is tied to the rollover funding needs of weaker eurozone governments, i.e., debts falling due in March through May, and therefore seems much more predictable than what happened to Greece or Ireland in 2010. The investment bankers who fell over themselves to lend to these countries on the way up, now lead the way in talking up the prospects for a serious crisis.
Brian Rezny submits: The word drama comes from a Greek word that means "action". Well, the drama in Greece continued this week, and now the Greek government is considering action: Prime Minister George Papandreou said the country is open to possible legal action against U.S. banks for any role they may have played in the crisis. In question: whether investment banks manipulated Greek bond prices through credit default swaps (these are insurance against default).