Stocks fall amid Greece uncertainty16/05/2012 - 09:38:10
Asian stocks fell after a failure by Greece’s political leaders to form a coalition government set the stage for new elections next month, keeping Europe’s debt crisis centrestage.
Japan’s Nikkei 225 index dropped 0.8% to 8,831.04 as investors remained focused on the turmoil in Greece.
South Korea’s Kospi fell 1.3% to 1,874.82 and Australia’s S&P/ASX 200 lost 1.8% to 4,190.20 amid sliding commodities prices.
Newly elected Greek leaders – hotly divided over how to resolve the country’s economic crisis – failed to form a new government. That means new elections must be held in June.
Traders fear a win by parties that oppose highly controversial austerity measures necessary for Greece to qualify for urgently needed bailout money. Without the money, the country would likely default on its debt and leave the euro common currency.
“The Greek crisis will continue to frustrate markets, keeping sentiment under pressure,” analysts at Credit Agricole CIB in Hong Kong wrote in an email.
Europe’s latest political impasse cast a gloom over financial markets. The euro plunged, and the Dow Jones industrial average extended a slide that has wiped out nearly 5% of its value in two weeks.
The Dow closed down 0.5% at 12,632. The Standard & Poor’s 500 index finished down 0.6% at 1,330.66. The Nasdaq composite index fell 0.3% to 2,893.76.