Updated on
Summary Asian markets tumbled Monday after weekend election results in France and Greece.
The markets were pummeled by weekend election results in Greece and France that heightened uncertainty about Europe s ability to solve its debt crisis.Signs of a faltering economic recovery in the U.S. compounded the dour mood while oil slid below $97 a barrel. Japan s Nikkei 225 index plunged 2.6 percent to 9,134.26 and Hong Kong s Hang Seng slid 2.4 percent to 20,582.24.Election results in Greece sent tremors throughout Europe as voters punished the parties responsible for highly unpopular austerity measures instituted to prevent the country from defaulting on its massive debts. No political party won enough votes to form a government leaving the political and financial future of the recession-hit country in serious doubt.Meanwhile, in France, President Nicolas Sarkozy lost to Socialist candidate Francois Hollande, who had criticized the country s austerity program and wants to boost government spending.Tokyo tumbled 2.62 percent by the break, Hong Kong slumped 2.45 percent, Sydney fell 1.51 percent, Seoul shed 1.70 percent, Wellington was 0.40 percent lower and Shanghai lost 0.41 percent.In Greece the two main parties -- the conservative New Democracy and the left-wing Pasok -- suffered huge defeats, with those opposed to more cuts winning almost 60.0 percent support in a general election.The losses follow months of protests against austerity measures across the country after the government was forced to ask for two bail-outs. However, while New Democracy, led by Antonis Samaras, remained the largest party it fell short of an absolute majority, raising the possibility of fresh elections soon.Also Sunday, Merkel s Christian Democrats grabbed only about 30.0 percent of the vote in polls for the small state of Schleswig-Holstein, a setback ahead of national elections in 2013.With the growing influence of anti-austerity political blocs, tensions among the eurozone will likely be intensified and a wave of renegotiations for bail-out programmes may be sparked, Kintai Cheung, analyst at Credit Agricole, said in a note.Sentiment had already been low over the eurozone after figures Thursday showed private-sector activity fell sharply in April, with even powerhouse Germany grinding to a halt.The Purchasing Managers Index (PMI) compiled by London-based research firm Markit fell to 46.7 points in April, well below an initial 47.4 estimate. Anything below 50 is considered contraction.Global economic anxiety was already high after Washington Friday released figures showing the US economy created only 115,000 jobs last month, which was below market expectations and less than half that at the start of the year.The report also suggested tens of thousands of Americans had dropped out of the job market, a bad sign for household incomes. The news burnt Wall Street, where the Dow Jones Industrial Average fell 1.27 percent, the S&P 500 lost 1.61 percent and the Nasdaq plunged 2.25 percent.The jobs data combined with a disappointing report Thursday on consumer spending from department stores to tip sentiment against the market.Gold was at $1,637.12 an ounce at 0230 GMT, compared with $1,630.60 late Friday.
