Latest Stories

Asian markets, euro dive on Europe election results


A man speaks on a mobile phone in front of a securities firm's electronic stock board in Tokyo, Monday, May 7, 2012. Asian stock markets were pummeled Monday by weekend election results in Greece and France that heightened uncertainty about Europe's ability to solve its debt crisis. AP PHOTO/SHIZUO KAMBAYASHI

HONG KONG—Asian markets and the euro slumped 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.

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, Singapore closed down 2.19 percent, or 65.64 points, at 2,924.95 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 $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 $1.3029 and 104.06 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 programs 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 $97.55 a barrel in the afternoon.

Brent North Sea crude for June shed 74 cents to $112.44.

Gold was at $1,641.00 an ounce at 1050 GMT, compared with $1,630.60 late Friday.

In other markets:

– Mumbai rose 0.48 percent, or 81.63 points, to 16,912.71.

Engineering giant Larsen and Toubro rose 4.79 percent to 1,202.9 rupees while top property firm DLF rose 4.34 percent to 189.75.

– Kuala Lumpur ended down 6.17 points, or 0.39 percent, at 1,584.87.

Plantation giant Sime Darby lost 0.2 percent to 9.77 ringgit, while budget carrier AirAsia shed 2.8 percent to 3.54 ringgit.

– Jakarta fell 1.37 percent, by 57.82 points, to 4,158.86.

Car maker Astra fell 1.7 percent to 71,500 rupiah, Bank Rakyat slid 0.8 percent to 6,500 rupiah and cement manufacturer Indocement decreased 1.6 percent to 18,550 rupiah.

– Taipei slumped 2.11 percent, or 162.87 points, to 7,538.08.

HTC fell 4.35 percent to Tw$450.0 while TSMC declined 2.28 percent to Tw$85.6.

– Manila closed 1.28 percent, or 68.02 points, at 5,229.53.

Megaworld Corp. fell 1.38 percent to 2.14 pesos while Metropolitan Bank and Trust slipped 2.17 percent to 90 pesos.

– Wellington closed 0.27 percent, or 9.65 points, lower at 3,540.13.

Contact Energy fell 0.83 percent to NZ$4.79, Fletcher Building shed 0.80 percent to NZ$6.23 and Telecom gained 1.97 percent to NZ$2.59.

– Bangkok was closed for a public holiday.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Asia , Crude prices , Finance , Forex , gold price , Stock Activity , stocks

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Sign maker to be nailed to cross for 28th time
  • 50 Quezon City cops each carry 30-kg crosses
  • AFP: Abu Sayyaf group, not MILF, target of Basilan operation
  • Massive infra spending set
  • DOJ to NBI: Arrest Cedric Lee, 4 others
  • Sports

  • Federer would skip tennis to be with wife, newborn
  • Manny Pacquiao in PBA? If so, he’ll wear No. 17
  • PSC sets Blu Girls US training
  • Power Pinoys settle for 7th place
  • Successful coaches to get raise
  • Lifestyle

  • Are your favorite malls open this Holy Week break?
  • Celebrate Easter Sunday at Buddha-Bar Manila
  • Moriones feast: A slow, steady transformation
  • Weaving ‘palaspas’ a tradition kept alive in Tayabas City
  • Finalists announced for best translated books
  • Entertainment

  • Why Lucky has not bought an engagement ring for Angel
  • Derek more private with new girlfriend
  • ‘Community’ star happy with return of show’s creator
  • Jealousy is kid stuff
  • Mommy-daughter adventure continues
  • Business

  • PH presses bid to keep rice import controls
  • PSEi continues to gain
  • Number of retrenched workers rose by 42% in ’13
  • PH seen to sustain rise in FDIs
  • Gov’t subsidies to state firms fell in first 2 months
  • Technology

  • Smart phone apps and sites perfect for the Holy Week
  • Tech company: Change passwords or suffer ‘Heartbleed’
  • Filling the digital talent gap
  • SSS to shut down website for Holy Week
  • Another reason to quit social media this Holy Week: your safety
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • First Fil-Am elected to Sierra Madre, Calif. city council
  • UC Irvine cultural night to dramatize clash of values in immigrant family
  • Filipino sweets and info served at UC Berkeley Spring Fest
  • Milpitas, California kids wrap up a successful run of ‘The Wiz’
  • Netizens welcome Japan’s visa-free travel plan
  • Marketplace