No wonder CBD so quiet today .
HONG KONG - Asian
markets and the euro tumbled on Monday after voters in France and
Greece voted out their ruling parties in a backlash against
austerity measures aimed at battling the eurozone crisis.
Adding to the bearish atmosphere was weak jobs data from the United
States last week, which had fuelled concerns about recovery in the
world's biggest economy and sent Wall Street sliding.
Singapore's benchmark Straits Times Index (STI) fell 2.19 percent
or 65.64 points to end at 2,924.95.
Tokyo dived 2.78 percent, or 261.11 points, to 9,119.14, Sydney
fell 2.16 percent, or 94.7 points, to 4,301.3 and Seoul shed 1.64
percent, or 32.71 points, to 1,956.44.
Hong Kong slumped 2.61 percent, or 549.35 points, to 20,536.65 but
Shanghai was almost unchanged, edging down 0.07 points to
2,451.95.
France's Nicolas Sarkozy was on Sunday dumped out by Socialist
Francois Hollande, who had campaigned on a platform of boosting
growth instead of introducing huge spending cuts to overcome the
country's deficit.
Sarkozy and German Chancellor Angela Merkel had led a strident
drive for budget cuts across Europe as the only way to drag the
region out of a crisis that has raised concerns that the eurozone
project could collapse.
"The Hollande win in France is not necessarily a surprise. However
it brings home the reality that incumbents following the (European
Union's) prescribed austerity measures are going to find it
difficult to remain elected," National Australia Bank said in a
note.
"What happens to these austerity measures now are what are weighing
on (the euro)," the bank said.
The euro skidded to US$1.2954 in early trade Monday, its lowest
level since late January, while also slumping to 103.22 yen at one
stage, its worst since mid-February.
It was later trading at US$1.3017 and 103.52 yen, still down from
$1.3091 and 104.50 yen late Friday in New York.
In Greece the two main parties -- the conservative New Democracy
and the left-wing Pasok -- suffered huge losses in a general
election, with those opposed to more cuts winning almost 60 percent
support.
The results follow months of protests against austerity measures
across the country after the government was forced to ask for two
bail-outs.
New Democracy, led by Antonis Samaras, remained the largest party
but with it and Pasok scoring only around 32 percent between them
the figures raised the possibility of fresh elections soon.
Also Sunday, Merkel's Christian Democrats grabbed only about 30
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.
The results raised concerns in Japan and China, which both hold
huge amounts of euro-denominated debt, with Tokyo saying it would
monitor Hollande's economic policies closely and Beijing warning
that his win would not be enough to dig France out of its
hole.
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.
In early European trade Monday the Paris CAC 40 opened 1.57 percent
lower and shares in Athens plunged 7.6 percent, while Frankfurt's
DAX was down 2.2 percent.
The interest rate on France's benchmark 10-year bonds also rose
amid fears over the country's debt-cutting plans. Yields on the
secondary market began to climb past Friday's closing rate of 2.809
percent, and stood at around 2.842 percent in mid-morning
trade.
Global economic anxiety was already high after Washington Friday
released figures showing the US economy created only 115,000 jobs
last month, below market expectations and less than half the rate
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 jobs data combined with a disappointing report Thursday on
consumer spending from department stores to tip sentiment against
the market.
On Wall Street Friday the Dow Jones Industrial Average fell 1.27
percent, the S&P 500 lost 1.61 percent and the Nasdaq plunged
2.25 percent.
Oil prices were also hit Monday amid concerns over falling demand.
New York's main contract, West Texas Intermediate crude for
delivery in June, fell 94 cents to US$97.55 a barrel in the
afternoon.
Brent North Sea crude for June shed 74 cents to US$112.44.
Gold was at US$1,638.75 an ounce at 0815 GMT, compared with
US$1,630.60 late Friday.
In other markets:
-- Taipei slumped 2.11 percent or 162.87 points to 7,538.08.
-- Mumbai rose 0.48 percent or 81.63 points to 16,912.71.
-- Kuala Lumpur ended down 6.17 points or 0.39 percent at
1,584.87.
-- Jakarta fell 1.37 percent or 57.82 points to 4,158.86.
-- Manila closed down 1.28 percent.
-- Bangkok was closed for a public holiday.
