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Asian markets join global sell-off on Greece concerns

in International Business

Asian markets join global sell-off on Greece concerns

Asian markets have dropped, tracking falls in Europe and the US, amid political uncertainty in Greece.

Greece’s left-wing Syriza bloc is trying to form a government and its leader is opposed to the austerity terms set in the Greek bailout deal.

There are fears Greece may not get the next instalment of its bailout if it does not stick to the spending cuts.

Japan’s Nikkei 225 index fell 1.3%, South Korea’s Kospi shed 0.7% and Australia’s ASX 200 dipped 1%.

“The market as a whole will be in risk-aversion mode due to the problems in Greece,” said Masayuki Doshida of Rakuten Securities.

Prolonged recovery?

Along with the results in Greece, there are also concerns about the impact of the outcome of the presidential elections in France.

The newly-elected French president Francois Hollande has said that he wants to renegotiate the terms of the eurozone financial pact aimed at cutting state spending.

Mr Hollande has said he wants eurozone economies to focus on growth rather than austerity to bring down debt levels.

However German Chancellor Angela Merkel has said that there will be no renegotiation of the agreement.

Analysts said that investors were worried that political wrangling may delay the process of solving the region’s debt crisis.

“This really just prolongs the possibility of recovery because now there is going to be a political debate about what’s the best way to proceed,” said David Joy of Ameriprise Financial.

On Tuesday, London’s FTSE 100 fell 1.8%, Germany’s Dax shed 1.9% and France’s Cac 40 dropped 2.8%.

In New York, the Dow Jones closed lower for the fifth straight day, down by 0.6% to 12,932.

Source: BBC News

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