Newspaper article International New York Times

Uncertainty over Greece Rattles Global Exchanges ; Fluctuations in China and Rout in European Bonds Add to Volatility

Newspaper article International New York Times

Uncertainty over Greece Rattles Global Exchanges ; Fluctuations in China and Rout in European Bonds Add to Volatility

Article excerpt

Fluctuations in Chinese stocks, concerns about the Greek debt crisis and a rout in European bonds contributed to shares' fickle movements.

Uncertainty about the debt crisis in Greece weighed on global stock markets on Thursday as a roller-coaster trading day in China added to the volatility . A rout in European bonds continued.

The Shanghai composite index closed nearly 1 percent higher, despite having slid more than 5 percent in the course of trading on Thursday. The index has gained a remarkable 53 percent thus far in 2015.

That fluctuation carried into Europe, where the Euro Stoxx 50 index of eurozone blue chips fell 1.5 percent in midday trading only to rally to roughly unchanged in the afternoon before closing down 0.8 percent. The FTSE 100 index in London lost 1.3 percent.

In New York, the Standard & Poor's 500-stock index was off nearly 1 percent in afternoon trading. The S.&P. 500 had gained about 0.4 percent the day before.

While the wild ride in Chinese stocks was the most visible sign of market volatility on Thursday, uncertainty over Greece's negotiations with its creditors also weighed on European stocks.

The creditors -- the European Commission, the International Monetary Fund and the European Central Bank -- "have been kicking the can down the road for a very long time," Philippe Gijsels, chief strategy officer at BNP Paribas Fortis, said Thursday. "But they don't seem to have made much progress, and there are some deadlines ahead."

Mario Draghi, the president of the European Central Bank, may have contributed to the market turmoil when he said Wednesday that the central bank would not try to manage bond markets or react to short-term fluctuations in prices. "We should get used to periods of higher volatility," Mr. Draghi said at a news conference in Frankfurt.

Big swings in prices, he said, are to be expected when interest rates are very low. And he emphasized that the central bank would continue a plan announced in March to buy 60 billion euros, or about $67 billion, of government bonds and other debt each month through September 2016 as part of an economic stimulus program. …

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