Global Stock Markets Crash Over Results Of European Elections


Asian and Australian markets crash nearly 3% while US stock futures are indicating a massive sell-off at Monday’s opening following the results of the elections in France and Greece.

Citizens of France and Greece have stage a massive coup against the politicians that have forced depressions style austerity measures upon the masses to pay bailouts for the global banking cartel.

In their rebellion they have elected by an overwhelming majority political candidates who have promised to tell the bankers to stick it where the son doesn’t shine which of course is new that the bankers don’t want to hear.

As a result, global stock markets have seen one of the most spectacular sell-offs in some time with stock in Asia selling off as high as 3% and the price of the Euro dropping below the psychological barrier of $1.30.

Worst hit seems to be the Greek Stock markets – at the epic center of the European Sovereign Debt Crisis – who say a massive 7% sell-off this morning prompting CNN to report the nation is now in political chaos following the election.

Meanwhile, US Stock market futures are indicating a Monday morning opening sell-off as well.

Given the schizophrenic personalities of the markets and their affinity to ignore reality and instead trade based on fake data, rumors, and what ever the latest statement is from the various heads of state around the world I wouldn’t be surprised to have the markets actually close the day up 2 to 3%.

Seriously, we have seen it time and again and all will take is some lame statement from some from EU leader to say the Euro zone remains dedicated to dealing with the crisis and hint at some kind of monetary easing in the future (that we all know can no longer be afforded) the markets are sure to take off in the opposite direction.

Of curse when that fails, they can just unleash high frequency trading algorithms to reverse the market crash which are sure to beat the hell out of any investor that dares make a trade on base on human rationality.
Press TV reports on the overseas markets:

Asian markets, euro fall on Europe election results

Press TV – The election results caused Tokyo shares to drop 2.6 percent in morning trade.

South Korea’s Kospi fell 1.7 percent and Hong Kong’s Hang Seng dipped 2.5 percent while stocks in Australia opened lower as well.

Meanwhile, the euro also dropped to its lowest level since late January and traded at $1.2954 in early trade Monday.

Greece is the epicenter of the eurozone debt crisis, where one in every five workers is unemployed, banks are in a shaky position, and pensions and government salaries have been slashed by up to 40 percent.

The Greek coalition government has adopted spending cuts in order to secure emergency bailout funding from the International Monetary Fund (IMF) and the European Union (EU).

The results of the parliamentary elections in Greece indicated that the voters were deeply unhappy with the spending cuts and tax increases required under the terms of two IMF and EU bailouts.

Reuters reported that immediately following the elections US stock market futures showed a 1% drop come Monday’s market opening.

US STOCKS-Futures hit after European elections
* U.S. stock futures fall after Greek, French elections
* Futures suggest a 1 pct decline at Monday’s open

May 6 (Reuters) – U.S. stock index futures fell after Greek voters trounced ruling parties in elections on Sunday, a result that put the country’s future in the euro zone at risk, and as Socialist candidate Francois Hollande won the French presidency.

S&P 500 futures were down 12.3 points at 1,350.20 at 7:35 p.m. EDT (2335 GMT), suggesting a fall of about 1 percent when the U.S. stock market opens on Monday.

Dow Jones industrial average futures fell 176 points, and Nasdaq 100 futures lost 28 points.

Results from Greece, with over 61 percent of the vote counted, showed the only two major parties supporting a European Union-International Monetary Fund program that keeps Greece from bankruptcy would struggle to form a lasting coalition.

In France, Hollande, shortly after winning the presidential election on Sunday against conservative incumbent Nicolas Sarkozy, promised to start a pushback against German-led austerity policies.

[…]

Source: Reuters

CNN reports on Greece:

Greek elections leave political system in chaos
STORY HIGHLIGHTS

  • New Democracy finishes first but will have an uphill battle to form a government
  • The Greek stock market plunges as the last votes are counted
  • Several parties see their support soar, fueled by those upset with austerity measures
  • No one party comes close to a majority and established parties suffer setbacks

Athens, Greece (CNN) — Greece’s center-right New Democracy party looks set to get the first chance to form a new government Monday, but party leader Antonis Samaras will have a complicated task after an election where angry voters punished politicians for backing harsh government budget cuts.

No party is likely to have anything approaching a majority, leaving the politically and economically volatile nation even more in flux.

The Greek stock market plunged about 7% Monday morning as the final votes from Sunday’s election were being counted.

With 97% of votes counted early Monday by the interior ministry, New Democracy — part of the present ruling coalition — finished first with 19% support to capture 109 seats.

That figure is barely half the percentage that it won in elections in 2009 and well short of what party leader Samaras admitted it hoped for entering this weekend.

“I asked for a strong mandate, but people chose differently. I respect their message,” Samaras said in remarks carried live on state television. “Today’s result expresses people’s disappointment towards the implemented dead-end economic policy that tested their limits and didn’t include the necessary development policy.”

In an apparent backlash against austerity measures, the two parties that spearhead the current coalition government earned far short of 50% of all 300 parliamentary seats. That means a new coalition government will again have to be formed.

[…]

Source: CNN

Stats Risk reports:
Euro punished after France, Greece elections

The euro sank in value on Monday as the electoral defeat of ruling parties in France and Greece stoked anxiety in Asia about the fate of austerity policies designed to end the eurozone’s debt crisis.

Among creditor nations in Asia, concern emerged in Japan and China about the zone’s policy direction after Socialist Francois Hollande beat President Nicolas Sarkozy in France and Greek voters punished pro-austerity parties.

Sarkozy’s defeat on Sunday was not necessarily a surprise, National Australia Bank said in a research note.

“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,” it said.

“What happens to these austerity measures now are what are weighing on (the euro).”

The single currency bought $1.2981 in afternoon trade in Tokyo, down from $1.3082 on Friday in New York. It also fell against the Japanese currency, dropping to 103.55 yen from 104.50 yen on Friday.

At one stage, the euro dipped to $1.2954, its weakest level since late January, while also slumping to 103.22 yen.

On Asian share markets, Tokyo stocks dropped 2.63 percent in afternoon trade, while Hong Kong dived 2.43 percent and Sydney shed 1.88 percent.

The anti-austerity, pro-growth platforms of Hollande and left-wing opposition parties in Greece resonated with voters tired of strict belt-tightening under their incumbent governments.

The fate of restrictive policies aimed at curbing mountainous debts and deficits in the common currency area now hangs in the balance, and Asian governments with big holdings of eurozone debt are watching closely.

Japan’s top government spokesman said Tokyo will “carefully monitor” how Europe reacts to the French election.

“The trajectory of the European economy greatly affects our economy,” Chief Cabinet Secretary Osamu Fujimura told reporters, adding that Japan considered discussions between France and European powerhouse Germany “important”.

In communist China the state-owned Global Times, which is known for its nationalistic tone, said the anti-incumbent results in France and Greece bore out the dangers of democracy running to “extremes”.

[…]

Source: Stats Risk

From Zero Hedge:

Europe Opens Down 2% As Sovereign Risk Surges

Germany’s DAX is the hardest hit so far of the major European equity markets (futures) with a drop of over 2.2% (underperforming the French CAC40 -1.5% for now). The EuroSTOXX 50 is down 2% and reflects the general state of affairs in European equity markets as they open – which is a little worse than the S&P futures market’s move since the European close on Friday. European credit markets are very quiet and illiquid thanks to the UK’s May-Day celebrations (and its position as hub for CDS market-making) but sovereign bonds are trading across mainland Europe and are being sold relatively hard so far. Spain, Italy, and Greece are underperforming with the former two pushing towards recent wide spreads even if yields remain off recent highs. EURUSD rallied a little off its overnight lows as Europe opens but has started to give back some of those gains. As the cash markets open there is some buying-the-dip pressure in stocks – even as govvies remain offered while financials remain under significant pressure. US equity futures and Treasuries remain in sync as ES limps a little higher off overnight lows.

10Y Spread to Bunds (in the red box) – green is not good in this case…

And European Equity futures (open in red – closed blue dashes) are all notably lower and underperforming the US-implied move from Friday’s European close so far…

Categories: WORLD NEWS

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