The day after moneymen in the US went public on warnings of an imminent stock market collapse, trading in Lisbon has hit a new low with losses reported of more than 2%.
A leading casualty has been PT (damaged by news that recent buyers Oi are pulling out and French group Altice will be taking over).
As 17,000 workers at PT are reported to be fearing for their jobs over the disastrous fusion with Oi, stocks fell by as much as 13%, while elsewhere share prices of Mota Engil, BCP and BPI banks all suffered significant losses.
It was the same story in the energy sector, with Galp and EDP also slipping.
The situation across European markets is also fairly bleak, but Portugal’s dip this week has been “the biggest drop among national markets”.
Meanwhile, ECB boss Mário Draghi is at loggerheads with German finance minister Wolfgang Schaeuble over the steps needed to revive the lack-lustre euro-area economy.
Speaking in Washington yesterday Draghi pledged to keep monetary policy loose and urged governments “with room to ease fiscal policy to do so”.
Where this leaves Portugal, with prime minister Passos Coelho declaring earlier this week that purse strings needed to stay tight, is anyone’s guess.
Warned hedge fund manager Mark Spitznagel – the expert who foresaw the 2008 crisis – in an interview with Bloomberg this week: “We have no right to be surprised by a severe and imminent stock market crash. In fact, we must absolutely expect it.”
