Fear of recession and national budget deficits that could trigger bailouts caused yields on Spain and Italy debt to soar.
Spain’s two-year rose to 6.08% up 51 basis points. Italy’s 10-year rose 22 basis points to 6.36%. Panic in the market rose as Spain said its GDP dropped 1% year-on-year.
According to MarketWatch:
Worries over Spain and Greece pushed European stocks sharply lower on Monday, led by steep declines for banks. The Stoxx Europe 600 index dropped 0.9% to 255.96. Spanish stocks were among the worst performers, following concerns the country will have to ask for a full sovereign bailout. The IBEX 35 tumbled 1.8% to 6,137.50, weighed by Banco Santander SA which was off 2.1%, Italian stocks dropped sharply, with the FTSE MIB index losing 2.5% to 12,741.06.
Douglas A. McIntyre