Market uneasy over big trouble in little Cyprus

Market uneasy over big trouble in little Cyprus

By William Leys (Sales Trader, CMC Markets)
20 March 2013

The All Ords is flat in morning trade as Eurozone stability concerns keep investors cautious.

Overnight, the Cypriot Parliament perhaps understandably rejected the EU's proposal to introduce a levy on deposits in Cypriot banks. The proposed levy, which was a means to fund the Cypriot bailout, has attracted wide spread criticism and condemnation due to the precedent it would set.

The upshot of this rejection is that the EU and the IMF will need to quickly come up with a more appealing bailout package to avert the impending Cypriot default. Until this happens uncertainty will continue, contagion fears will linger, and markets will likely remain under pressure.

The local market is also being weighed down by the big miners, after Goldman Sachs reduced its 2015 iron ore forecast to average $80 per metric tonne, based on the outlook for increased supply. Investors appear to have taken heed, with BHP, RIO and FMG all shedding in excess of 2% since the release.

www.cmcmarkets.com.au.

ENDS

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