Once again, investors around the world turned their attention to Greece on Wednesday, as the heavily indebted nation unveiled a new round of budget cuts and tax increases to gain control over its rapidly-swelling budget deficit. Measures included a 2% bump to the VAT, additional taxes on tobacco and fuel, a freeze on civil servant pensions, and a 30% reduction to public sector workers. The reaction was generally positive, as European neighbors praised the move and the euro zone’s common currency regained ground lost in recent weeks as concerns about its survival swirled (see Five ETFs For A Tumbling Euro).
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, added 2.27 points, or 0.2%, to close at 1,031.78. The index has now climbed in four consecutive sessions, and is nearly back to even on the year.
The Market Vectors Gold Miners ETF (GDX) was among the day’s biggest gainers, adding 2.0% as gold prices rose and the outlook for mining stocks improved. GDX has been one of the most volatile equity ETFs in recent months, regularly moving by 2% or more in a single session. GDX has now climbed more than 15% over the last four weeks, and finds itself back in positive territory on the year.
The day’s biggest loser was the PowerShares DB U.S. Dollar Bullish Fund (UUP), a fund designed to replicate the performance of being long the U.S. dollar against a basket of developed market currencies. UUP closed down 0.6%, primarily due to a rally in the euro relative to the greenback. After being hammered in recent weeks by concerns over the ultimate impact of the budget crisis in Greece, the euro zone currency showed signs of life as investors were apparently impressed with the austerity plan.
Disclosure: No positions at time of writing.