Exchange traded funds tracking Europe’s major stock benchmarks recovered somewhat Wednesday after a nasty three-day slide on worries a vote in Greece may derail the financial bailout.
Vanguard European ETF (NYSEArca: VGK) rose 2% on Wednesday as investors awaited the Federal Reserve announcement following the central bank’s two-day meeting. [Germany ETF Down 6% on Greek Referendum]
The European ETF fell sharply Tuesday after Greek Prime Minister George Papandreou called for a referendum on the bailout, a move that surprised markets. Some key banks in Greece saw shares fall 12% as the reality of Greece leaving the Eurozone has become a possibility, reports Murray Coleman for Barron’s.
“The market is going to continue going up and down based on news out of Europe,” Adrian Day of Adrian Day Asset Management said on Investors Business Daily
In currency ETFs, CurrencyShares Euro Trust (NYSEArca: FXE) rose 0.7% on Wednesday.
The focus has been on Greece at the moment, but the fact remains the Italy could be next up. The iShares MSCI Italy index (NYSEArca: EWI) plummeted almost 7% Tuesday as investors were reminded that the Eurozone’s problems run deeper than Greece. [Italy ETFs May Hold Market Clues]
Vanguard European ETF
Tisha Guerrero contributed to this article.
Read the disclaimer; Tom Lydon is a board member of the funds for Rydex|SGI.