World stocks volatile amid Greek political turmoil
Tuesday, 08 May 2012 | 14:30
World stock markets were volatile Tuesday as the initial shock from election results in Europe faded but skepticism grew over whether Greece could form a government capable of fixing its financial mess.
European shares fell in early trading, failing to sustain a recovery in the prior session. Britain's FTSE 100 fell 0.2 percent to 5,645.31. Germany's DAX slipped 0.6 percent to 6,531.02 and France's CAC-40 dropped 1.4 percent to 3,168.96.
Futures pointed to losses on Wall Street. Dow Jones industrial futures fell 0.5 percent to 12,899 and S&P 500 futures dropped 0.5 percent to 1,359.
Asian shares posted modest gains. Japan's Nikkei 225 index edged up 0.7 percent to close at 9,181.65, a day after closing at its lowest level in three months.
Markets were thrown into a tailspin Monday after weekend elections in France and Greece led to a sharp shift in the political landscape. In France, President Nicolas Sarkozy was thrown out of office by voters opposed to his belt-tightening program. Investors are worried that a changing of the guard in Europe's leadership could jeopardize its plans for fighting a two-year debt crisis.
"Although the French election result has now been deemed to not be a threat, Greece remains a significant concern and is likely to be a source of volatility through the week," Stan Shamu of IG Markets in Melbourne said in an e-mail.
In Greece, voters punished the two parties that have overseen the country's harsh austerity measures and left no party with enough votes to form a government. Efforts to patch together a coalition so far have failed.
While Hollande has managed to reassure investors with his commitment to economic growth, worries intensified about Greece's ability to stay solvent and remain in the 17-member euro currency bloc.
The anti-austerity verdict from European voters will likely force leaders to come up with more acceptable solutions to the debt crisis. The deep cuts in government spending have already worsened the situation in many countries, leading them into deeper economic distress and increasing already high unemployment.
In other Asian markets, South Korea's Kospi added 0.5 percent to 1,967.01. Australia's S&P/ASX 200 rose 0.3 percent to 4,314.30.
Benchmarks in Taiwan, Indonesia and Singapore also gained. But Hong Kong's Hang Seng fell 0.3 percent to 20,484.75. The Shanghai Composite Index fell 0.1 percent to 2,448.88 and the Shenzhen Composite Index slipped 0.1 percent to 980.26.
Among individual stocks, big Japanese exporters clawed back territory lost in Monday's sell-off. Yamaha Motor Co. gained 2.1 percent and Nissan Motor Co. rose 3.1 percent. Toshiba Corp. jumped 2.9 percent.
Benchmark oil for June delivery was down $1.16 cents to $96.78 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 55 cents to settle at $97.94 in New York on Monday.
In currencies, the euro fell to $1.3010 from $1.3050 late Monday in New York. The dollar fell to 79.85 yen from 79.94 yen.
Source: Associated Press
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