by James Mackintosh
Financial Times
June 22, 2011
Market reactions often seem little short of eccentric. Wednesday morning was a case in point. Overnight, George Papandreou scraped through a vote of confidence, hanging on as Greece’s prime minister. That was unmitigated good news: anything else would have led to political chaos and a near certainty that Greece would default next month on debt repayments.
Instead of being pleased, traders headed for safety, buying German Bunds and selling European equities.
While that makes little sense on a naive view, no one in the markets thought it was odd. It is simply another case of “buy the rumour, sell the news”. European shares had jumped 1.4 per cent on hopes that Mr Papandreou would win.
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