" May 5 (Bloomberg) -- The cost of protecting corporate bonds from default surged in Australia and Asia after U.S. and European stocks and the euro plunged on concern Greece’s debt crisis may spread.
The Markit iTraxx Australia index of credit-default swaps jumped 14 basis points to 99 basis points as of 8:32 a.m. in Sydney, on course for its biggest one-day increase since June 23, according to prices from Nomura Holdings Inc. and CMA DataVision in New York. That would be the highest closing level since Feb. 19, the prices show.
“After a very brief pause, sovereign risk contagion fears gripped both the debt and equity markets in Europe last night and it was pretty much one way traffic -- lower for equities and wider for credit,” National Australia Bank Ltd. analysts led by Michael Bush wrote in a note to clients today."
This has a substantial effect on stock prices.
from Bloomberg
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