World stocks fall amid political turmoil in Greece - Yahoo Finance World stocks fall amid political turmoil in Greece - Yahoo Finance

Wednesday, May 23, 2012

World stocks fall amid political turmoil in Greece - Yahoo Finance

World stocks fall amid political turmoil in Greece - Yahoo Finance

BANGKOK (AP) -- World stocks dived Wednesday 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 center stage.

The turmoil in Greece sent European shares lower in early trading. Britain's FTSE 100 fell 0.9 percent to 5,388.93 and Germany's DAX slid 1 percent to 6,335.93. France's CAC-40 was down 0.4 percent at 2,036.30.

Wall Street was also headed for a lower opening, with Dow Jones industrial futures losing 0.1 percent to 12,589. S&P 500 futures were 0.2 percent down at 1,325.90.

Asian benchmarks recorded sharp losses earlier in the day.

Japan's Nikkei 225 index dropped 1.1 percent to close at 8,801.17, its lowest close since Jan. 30, amid discouraging economic news. Core private-sector machinery orders fell 2.8 percent in March, the first drop in three months, Japan's Cabinet Office said.

Hong Kong's Hang Seng plummeted 3.2 percent to 19,259.83 and South Korea's Kospi fell 3.1 percent to 1,840.53. Australia's S&P/ASX 200 lost 2.4 percent to 4,165.50 amid sliding commodities prices.

Newly elected Greek leaders — hotly divided over how to resolve the country's economic crisis — failed Tuesday to form a new government. That means new elections must be held in June.

Some investors fear a win by parties that oppose unpopular 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.

Mainland Chinese shares also lost ground, with the benchmark Shanghai Composite Index falling 1.2 percent to 2,346.19. The Shenzhen Composite Index dropped 1.4 percent to 942.04. Shares in real estate, cement producers, furniture makers and financial companies weakened.

Elsewhere, blue-chip shares across sectors throughout Asia registered sharp losses. South Korean electronics giant Samsung Electronics Co. plunged 6.2 percent and Hyundai Motors Co. shed 4 percent. In Japan, Toyota Motor Corp. lost 2.1 percent. Nomura Holdings Inc. lost 1.5 percent.

Shares of major Chinese shipping companies plummeted amid fears of weakness in Europe, a critical export market. Hong Kong-listed China Shipping Container Lines Co. sank 5.2 percent. China COSCO Holdings Co. dropped 3.7 percent.

"The Chinese shipping sector is down sharply and continues to downtrend," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. "The market is not good right now, but I expect a technical rebound is coming."

Falling commodities prices hurt Australia's mining sector. BHP Billiton Ltd., the world's largest mining company, lost 4.1 percent. Rio Tinto Ltd. was down 3.9 percent. Paladin Energy Ltd. tumbled 9.3 percent.

Benchmark oil fell $1.56 to $92.42 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 80 cents Tuesday to finish at $93.98 per barrel in New York — oil hasn't finished that low since Dec. 19.

In currencies, the euro fell to $1.2716 from $1.2734 late Tuesday in New York. The dollar rose to 80.36 yen from 80.27 yen.


AP researcher Fu Ting contributed from Shanghai.

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