On Thursday, stock markets in Asia and the euro dropped in value because of concerns related to a slowdown in world economy, which includes raised oil prices and data revealing that the European zone might be headed towards recession, which has fanned fresh concerns regarding Greece.
The MSCI’s broadest index of Asian Pacific shares outside of Japan dropped by 0.2 percent, after it increased in value in the past four days following the announcement by European ministers regarding Greece’s second bailout package.
Moreover, opening for the Nikkei 225 index remained flat. On the other hand, the euro stood at a value of $1.3252, as it struggled to go beyond a two week record number of $1.3293, a value it reached following the Greece deal on Tuesday. The dollar went on to a new, seven month high against the Japanese Yen, settling at a value of 80.40 yen.
Even though the general sentiment in the market suggests that Greece might have found the “perfect” solution, given the state it was in and the limited number of options the indebted nation had at its disposal, many economists believe otherwise. There would have been no other option for Greece instead of the 2nd bailout package, which it has received on stringent conditions. The conditions attached to the bailout package involved further cuts in employment and minimum wages.
Unemployment in Greece is already about 20 percent or more and further cuts in employment would further increase unemployment rate in the country. However, despite Greece receiving a bailout package, economists believe the European region headed towards recession.
As global markets have cooled off, the focus shifts towards oil prices, which are still oscillating because of mounting tensions between Iran and the western powers. This year alone, oil prices have increased by 11 percent because of tensions in Iran and with things continuing the way they are, prices will increase further.
