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LONDON - European credit spreads hit record wides on Friday after Asian stock markets tumbled as more
news of big job cuts and bleak outlooks from carmakers deepened fears of a prolonged global recession.
By 0625 GMT, the investment-grade Markit iTraxx Europe index was at 167.5 basis points, according to data from
Markit, around 6.5 basis points wider versus late on Thursday, after earlier reaching 169.25.
The Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was at 828 basis points, 15 basis points wider and also a fresh record wide.
"Asian markets have got hammered," said one trader. The Nikkei average hit a 5-1/2 year closing low on Friday.
The drive wider in spreads, one analyst said, is also partly due to a reassessment of recovery rates by structured
credit desks. That has led to more buying of protection on the Europe index as a hedge, pushing that index wider.
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