A trader makes a phone call at the stock market in Frankfurt today when the German stock index DAX went down more than two per cent. Michael Probst/AP/Press Association Images

Markets fall as EU fiscal agreement does little to inspire confidence

Buoyant upon initial news of the deal last week, the markets were not so happy today…

INVESTORS’ CONCERNS OVER the future of the euro did not appear to be allayed today as stock markets fell across Europe amid fears that the fiscal compact agreement in Brussels last week was not enough to bring stability.

Shares did rally on news of a deal last Friday morning and closed strongly at the end of the week but analysts are warning that the deal, which will enshrine greater budgetary discipline in the eurozone, does not deal with the existing debt issues in Greece, Ireland and Portugal.

There also continues to be concerns about the mounting debt problems in Italy and Spain where the yield on 10-year bonds were at 6.5 and 5.7 per cent today.

On the stock markets, the UK’s FTSE 100 was down by nearly 2 per cent at the close of play, the Cac 40 in Paris was down by over 2.5 per cent and the Dax in Germany was down by over 3 per cent.

Shares were mixed at the close of play in Asia earlier today while in the US – at the time of writing – the Dow Jones and the Nasdaq are both down by around 1.7 per cent.

“The (EU) measures may not be sufficient for markets, with disappointment at the lack of ECB action in terms of stepping up to the plate as lender of last resort still weighing on sentiment,” said Mitul Kotecha, analyst at Credit Agricole CIB referring to last week’s statement by the ECB president Mario Draghi.

- additional reporting from AP

Explainer: What’s in the new EU deal – and what does it mean for Ireland?

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