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Portuguese stocks plunge on political crisis

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(Globalpost/GlobalPost)

Portugal's share prices plummeted and the country's borrowing costs soared to danger levels Wednesday as Prime Minister Pedro Passos Coelho's government tottered after top ministers quit.

Foreign Minister Paulo Portas resigned Tuesday evening, a day after the shock departure of Finance Minister Vitor Gaspar, pushing the government to the edge of collapse.

The political crisis in recession-wracked Portugal spread fears in world markets of a new wave of instability from the bailed-out nation on the eurozone's debt-laden periphery.

The Lisbon stock exchange's main index plunged 5.99 percent to 5,199.01 points in the first half hour of trading. Other stock markets across Europe fell, too.

The yield on benchmark 10-year Portuguese government bonds spiked above eight percent for the first time since November 2012, hitting 8.023 percent before easing a little. It had closed at 6.720 pecent the previous day.

A 10-year borrowing rate of about 8.0 percent is widely considered unsustainable for a country such as Portugal.

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http://www.globalpost.com/dispatch/news/afp/130703/portuguese-stocks-plunge-political-crisis