Greek referendum makes European stock exchanges jumpy

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The increasing uncertainty about the debt crisis is putting financial markets under pressure. The Amsterdam stock exchange opened almost two points lower this morning. However analysts had expected poorer results. The MidKap Index of Dutch medium-sized companies fell 1.8 percent following a decision to suspend financial help for Greece until a referendum on the euro has been held. Other European stock exchanges also opened much lower.

Financial markets will probably remain jumpy until the beginning of December when the referendum is due to be held, according to stock exchange trader Rob Koenders of Harmony Vermogensbeheerder, as the poll could result in a no-vote.

Investors will be watching what happens at the G20 summit held in France on Thursday and Friday. They will also keep an eye on the European Central Bank’s decision on interest rates, while processing a series of company results for the third quarter at the same time.

Greek Prime Minister George Papandreou surprised European leaders earlier this week by announcing a referendum to muster support for the stringent austerity measures following mass protests at a national holiday parade.

After a crisis meeting with Greek Prime Minister on Wednesday, German Chancellor Angela Merkel and French President Nicolas Sarkozy announced that Greece would not be receiving the next instalment of 8 billion euros in financial aid until the referendum had been held.

In the Far East, the main stock exchanges showed losses on Thursday. In Tokyo, the stock exchange was closed due to a national holiday. Meanwhile on the other side of the ocean, Wall Street ended with profits on Wednesday after a promising employment figures lifted the mood.

European stock exchanges also ended in high spirits on Wednesday. In Amsterdam the AEX-closed 0.7 percent higher at 298.21points. The MidKap index ended unchanged at 466.65 points. In London, Paris and Frankfurt stock exchanges closed 2.3 percent higher.

The value of the euro was just as high before the European stock exchanges opened at 1.3687 dollars as at the end of Wednesday.

© Radio Netherlands Worldwide

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