ROME: Anxiety over Greece’s new anti-austerity leadership and unexpectedly poor US performance data has weighed down European stock markets, analysts say.
Frankfurt’s DAX 30 index sank 1.6 per cent to close at 10,628.58 points, while in Paris; the CAC 40 shed 1.1 per cent to 4,624.21 points.
London’s benchmark FTSE 100 index of top companies edged down 0.6 per cent to end the day at 6,811.61 points, as investors also digested data showing Britain’s economic growth slowed to 0.5 per cent in the fourth quarter of 2014.
The Athens stock market plunged more than 6 per cent before recovering slightly at the close as investors fretted over whether the new radical left government will renege on Greece’s international bailout.
The main Athex index tumbled 3.2 per cent the previous day after anti-austerity party Syriza won the Greek election.
“Gravity took hold… after several days of huge gains inspired by the beginning of a quantitative easing program by the European Central Bank,” Jasper Lawler, an analyst at CMC Markets UK, said.
“Banking stocks led the declines in a delayed reaction to the risk posed by their Greek counterparts on a possible Grexit,” he added, referring to the spectre of Greece being forced to leave the eurozone.
Shares in Germany’s Deutsche Bank plunged 3.4 per cent, while in France Societe Generale lost 2.3 per cent and Britain’s RBS was off 1.8 per cent.
New Greek Prime Minister Alexis Tsipras unveiled his anti-austerity coalition administration, bringing together his radical left-wing party with a small party on the nationalist right, after a stunning election win that sent shockwaves through Europe.
The appointment of radical left-wing economist Yanis Varoufakis as his finance minister was seen as a signal that the new government will take a hard line in haggling over Greece’s EU-IMF package.
Mr Tsipras declared Sunday that Greece is “leaving behind disastrous austerity” and the so-called troika of creditors “is finished”, in reference to the country’s international lenders the European Union, the International Monetary Fund and the European Central Bank.
Syriza are the first anti-austerity party to govern in Europe, but they fell two seats short of a 151-seat majority in parliament and were thus forced to forge the coalition with the small nationalist Independent Greeks (ANEL) party.
In New York, the Dow slumped more than two per cent in mid-morning trade following a raft of mostly weak earnings reports from big companies and a surprising drop in durable goods orders.
