Monday, March 18, 2013

Cyprus Deal Rattles Markets

LONDON--Global stock markets slumped Monday after the weekend's news that Cyprus would tax all of its bank depositors to help fund its bailout, though European shares recouped much of their early, steep fall as the day wore on.

Investors wavered in their assessment of whether the move to tax bank deposits�the first in the euro-zone crisis�would be a passing event in a remote, small island or an ominous rumbling that could shake the currency bloc's wobbly confidence. By the end of the day in Europe, the verdict was mixed: Investors were unsettled but didn't react as if a major intensification of the crisis was at hand.

Shares were lower almost everywhere on the continent, and bonds of troubled countries weakened, but there were no signs of broader unrest outside Cyprus. The euro lost ground against the dollar.

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