Greece’s private debt holders accept deal but markets recoil

The Institute of International Finance, which includes dozens of banks, insurers, asset managers, hedge funds and other major investors in Greek bonds, has indicated that it will accept a debt swapping deal with Athens.

Under the deal, the country’s creditors will accept new bonds worth about 46.5% of the face value on their original investments, thus allowing Greece to write off about $132 billion in debt. Creditors must reveal their positions by Thursday night.

Fears of diminished growth in China, however, increased pressure on markets across Europe and Asia during Tuesday trading. Yesterday, Prime Minister Wen Jiabao projected a lower-than-expected growth rate of 7.5% in 2012.

By morning trading, London’s FTSE had fallen 1.12%, the German DAX had dropped 1.53% and the French CAC 40 had depreciated 1.74%. The euro slipped 0.66% to $1.313 and the British pound depreciated 0.58% to $1.5769.

In Asia, the Nikkei (EWJquote) dropped 0.63%. Nissan announced at the Geneva Motor Show that it will build a new compact car at its factory in Sunderland, Northern England. Nissan says the $197 million investment will create 2,000 new jobs. Shares of Nissan fell 1.36%. Rivals Toyota and Honda stock slid 0.61% and 1.93% respectively.

Seoul’s KOSPI (EWYquote) took a hit of 0.78%. South Korean exporters Samsung and LG, however, showed strength, with their shares appreciating 0.51% and 0.47%, respectively.

The Shanghai Composite (YAOquote) slid 1.41%, its biggest drop in a month.

Meanwhile, Australian stocks (EWAquote) dipped 1.35% and in Singapore, shares (EWS, quote) were down 2.00%.

The Chinese yuan rose 0.02% to 6.3078 to the dollar, while the Japanese yen depreciated 0.61% to 81.02 against the greenback.

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