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Banks (Finance)

Global Markets Plunge Amid Greek Bailout Referendum Shock

Strategic Insights

— 1 min read

Global markets are in chaos as a surprise move by the Greek Prime Minister sends shockwaves across the Atlantic. Bank shares are plummeting in pre-market trading, with many hitting fresh session lows. The Greek Prime Minister's decision to hold a referendum on the latest EU bailout plan has sparked widespread panic among investors.

Key Takeaways:

  • The Greek Prime Minister's announcement of a referendum on the EU bailout plan sent global markets into a tailspin, with bank shares plummeting.
  • Shares of Bank of America (BAC) have fallen 6.52% to $6.38, while Citigroup (C) has tumbled 8.45% to $28.92.
  • U.S.-traded shares of European banks are also sharply lower, with Barclays (BCS) down 11.03% at $11.13, Deutsche Bank (DB) down 10.99% at $36.86, Credit Suisse (CS) down 10.70% at $25.87, and ING Groep (ING) down 15.74% at $7.28.
  • The EU bailout plan involves a three-part plan to cut Greece's debt burden by writing down 50% of the value of government bonds held by banks and other private investors, recapitalizing European banks, and boosting the firepower of the euro-zone bailout fund.
  • The SmarTrend Alert, an automated pattern recognition system, had indicated an uptrend for BAC on 10-27-2011, BCS on 09-27-2011, and C on 10-12-2011, but these signals were ignored in the face of the Greek Prime Minister's surprise announcement.

Statistics:

  • The Greek Prime Minister's announcement led to a 6.52% drop in BAC shares to $6.38.
  • Citigroup (C) shares plunged 8.45% to $28.92.
  • U.S.-traded shares of European banks fell by an average of 11.03% with BCS at $11.13, DB at $36.86, CS at $25.87, and ING at $7.28.
  • The EU bailout plan involves a 50% write-down of government bonds held by banks and other private investors.

Sources:

  • MidnightTrader, "Bank Shares Plunge as Greece Default Looms," November 1, 2011.
  • Comtex SmarTrend Alert, "UPTREND on 10-27-2011 for BAC @ $7.07."
  • Comtex SmarTrend Alert, "UPTREND on 09-27-2011 for BCS @ $10.48."
  • Comtex SmarTrend Alert, "UPTREND on 10-12-2011 for C @ $29.08."
  • Comtex News Network, Inc. Copyright 2004-2011. All rights reserved.

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