"There will always be a black sheep in the family"
That sums up what happened yesterday when Greece's Prime Minister Papandreou called for a referendum to vote on whether to accept the latest EU/IMF bailout and should Greece Euro membership. That piece of news shocked the world and sank global markets again. Just last week, Greece was given a lifeline with the outcome of the EU Summit and yet within days, they come out to create damage again. Should Greece failing to accept the bailout package or opt out of the Euro, they will result in total default and that will impact the EU banks. That was why, financial sector was severely sold down.
Without knowing the exact motive of what Papanderou was, all investors hope will be this coming Friday the vote of the referendum will not create heavy damage. Should Greece exits Euro, short-term wise, will be a big dent to the EU financial sector and not to mention the global stock markets but long-term wise, that properly is the best way to bail Greece out of all the debt.
On the lighter side, the recent slowing down of growth in China and slight cooling of inflation has prompted China a possibility to ease monetary tightening to spur growth and that should not be overlooked.
Investors will have to monitor on the 2 front, the bad side of Europe and the brighter side of China. Either of this event will have impact on global stock markets. Until then for a clearer confirmation, global stock markets are back to volatile days as they did in the past 2 months.
food for thoughts
"Market always over-react be it good or bad news, one should just ignore those noise and opportunity will present itself to you"
