The market is down 37 after world markets fell following the eurozone deal to bail out debt-laden Cyprus. The Dow Jones closed down 64 after hitting an all-time high of 14,563 early on in the session and European markets reversed 1% gains with some (Italy and Spain) closing down over 2%. The deal may rescue the government in the short term but still risks a run on Cypriot banks this week when they reopen on the news that some depositors will lose up to 40% of their deposits with no guarantee they won’t one day extend the levy to smaller deposits. The EU, ECB and IMF have through this deal implicitly endorsed a breach of the sanctity of European bank accounts by government, a very dangerous precedent and one that will reverberate beyond Cyprus and will certainly change the attitude of foreign investors in Europe who have borne most of the deposit losses in Cyprus. The Dow was up 52 at best and down 117 at worst on below average volumes.
Dutch Finance Minister and Eurogroup head Jeroen Dijsselbloem gave an interview to Reuters in which he explained how the Cypriot bank restructuring may be used as a template for future bailout talks. The Eurogroup head said, “Cyprus is a unique case…no models or templates are used.” Italy down 2.50% and Spain down 2.27%.
European markets down — UK FTSE down 0.22%, Germany down 0.51%, France down 1.12%, Spain down 2.27%, Italy down 2.50%.
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Metals mixed — copper down 0.47%, nickel down 1.07%, aluminium down 0.99%, tin up 1.07%. Spot iron ore up 70c to $136.00. Gold down $2.10 to $1604.00. Oil down 90c to $94.61.
- Kathmandu (KMD) — Has posted an interim profit of $NZ10.33 million, up 72.7%. The result was above guidance for a profit of between $NZ9.5 million to $NZ10 million. KMD is up 1.02% to 198.5c.
- Cash Converters (CCV) — Has secured $60 million from Westpac, which the company will use grow its personal loan book. CCV is up 0.76% to 132.5c.
- Norfolk Group (NFK) — Has given a market update. The company has terminated its contract with GE transport. The termination will not impact the company’s expected EBIT for the year to March 31, 2014. Market guidance for reported 2013 financial year EBIT has been revised and 2014 financial year guidance reaffirmed, i.e in the range of $25 million to $30 million. NFK is up 13.19% to 51.5c.
- Transfield Services (TSE) — Has been awarded a $170 million contract with the NBN. TSE is down 2.01% to 182.75c.
- UGL — Is carrying out a strategic review, which may lead to the possible sale of its property services division. Analysts value the division at around $866 million to $962 million. UGL is up 7.95% to 1018c.
- Westfield Group (WDC) — Says it will receive $US700 million from the sale of stakes in six Florida malls. WDC is up 2.7% to 1105c.
- Karoon Gas (KAR) — Stock was down 8.93% yesterday as the company announced its Brazilian well did not yield oil. KAR is down another 4.63% to 535c.