The fiscal health of Spain’s economy came into question Monday after several regions asked for aid, sending the broad equities market and stock exchange traded funds into risk-off mode.
The iShares S&P 500 Index (IVV) was down 1.3% and the SPDR Dow Jones Industrial Average (DIA) was 1.1% lower at at last check Monday.
The broad markets plunged after Spanish media announced up to six regions were seeking aid after Valencia sought financing Friday, reports Herbert Lash for Reuters.
The Spain ETF iShares MSCI Spain Index (EWP) fell 1.4% Monday.
Investors were concerned that we might see another Greek default situation, but this time in a country over four times the size of Greece – in 2011, Spain had a $1.4 trillion GDP, compared to the $298.1 billion GDP of Greece.
“The week is off to a challenging start as rising fears over Europe push risk aversion higher,” Camilla Sutton, chief currency strategist, said in the article. “Most of the focus is on Spain, with rising concern it too will need to access financial aid.”
ETFs that follow European stocks took the brunt of the hit during trading. The Vanguard MSCI Europe ETF (VGK) dropped 2.4% and the iShares S&P Europe 350 Index (IEV) declined 2.6% Monday.
iShares S&P 500 Index
IVV_ETF
For more information on the Eurozone, visit our Europe category.
Max Chen contributed to this article.
