Euro Falls As Concerns Over Greece Return (SNE, C)

A sense of uncertainty hung over markets on Friday leading to a dip in global stocks and the euro falling to an 18 month low. Markets remained nervous about the European debt crisis and the pace of the global recovery. Sony (ADR) SNE, while releasing results after the close of markets on Thursday warned that the fallout from the Greek debt crisis could undermine its return to profit. This added to the nervousness in the market by underlining how Greece’s troubles were impacting a company based in far away Japan. The euro fell below the $1.25 level, to $1.245 by late morning in Europe, its weakest level against the U.S. dollar since November 2008. Despite the huge financial package announced to ease the euro zone countries debt troubles, the market sentiment has remained fragile at best. In a research note on Friday, analysts at Barclays Capital summed up the overall picture: “Calm after the tempest, but still a perilous climb.” “What surprised me was that there was no real feel-good factor,” said Markus Rösgen, head of regional strategy at Citigroup C in Hong Kong, referring to the global market reaction to the bailout package. “But at the end of the day, Europe has written an insurance policy, rather than pumping actual money into the market.” Many analysts are of the view that a debt default is still likely in the future. This concern is hanging heavily on the euro and it is unable to recover even after the announcement of the aid package. Since the start of the year, the Euro has fallen 13 percent against the dollar.