NEW YORK/LONDON – Global stock markets have been rattled for the past week over uncertainty surrounding Greece. Investors worry that a default by Athens on its debts could cripple European banks and cause fiscal strain on much larger European countries like Italy.
Dealers said the latest twist in the Greek saga over its on-off debt bailout was on the face of it positive but still left much unsettled, with elections now planned for February to prolong the uncertainty.
Greece, Ireland Portugal to seek debt rescues from the EU and International Monetary Fund.
Italian stocks, however, rallied strongly after sharp early losses on rumors - strongly denied - that Prime Minister Silvio Berlusconi was set to resign, with investors hoping a new government would provide more convincing leadership.
In London, the London’s FTSE-100 index of top companies closed down 0.30 percent at 5,510.82 points. In Paris, the CAC-40 fell 0.64 percent to 3,103.60 points and in Frankfurt the DAX 30 shed 0.63 percent to 5,928.68 points.
Milan bucked the trend, gaining 1.32 percent while Madrid fell 1.40 percent.
The euro slipped to $1.3743, coming off highs above $1.3800 and down from $1.3788 late Friday while the dollar fell to 78.06 yen from 78.23 yen.
The Dow Jones industrial average was down 86.09 points, or 0.72 percent, at 11,897.15. The Standard & Poor’s 500 Index was down 10.04 points, or 0.80 percent, at 1,243.19. The Nasdaq Composite Index was down 30.78 points, or 1.15 percent, at 2,655.37.
Asian stocks stalled Monday as investors remain unsure whether Greece will be able to work itself out of a debt crisis despite a weekend deal by the country’s leaders aimed at implementing a controversial austerity program.
Oil prices rose to near $95 per barrel, while the dollar gained against the euro but slipped against the yen.
Japan’s Nikkei 225 index fell 0.3 percent to 8,776.25. South Korea’s Kospi lost 0.4 percent to 1,920.34 and Australia’s S&P/ASX 200 was 0.2 percent down at 4,273.40. Hong Kong’s Hang Seng fell 0.2 percent to 19,813.12. Shares in China were also lower, while Benchmarks in Taiwan, Thailand and New Zealand rose.
Meanwhile, oil prices Monday climbed to around $95 per barrel for the first time since early August on hopes that Greece will adopt the spending reforms it needs for an international bailout package and avoid default.
Benchmark crude rose 62 cents to $94.89 per barrel at midday in New York, while Brent crude rose $2.02 to $113.99 in London.
Investors were relieved by the reduced chances of a default in Greece, which could have led to bank failures across the eurozone. – Agencies