ROME: European stocks have descended in early trading and the euro hit a nine-year low versus the US dollar with the ECB appearing on course to more prop up the euro zone.
London’s benchmark FTSE 100 index slipped 0.12 per cent to 6,539.97 points on Monday compared with the close on Friday.
Frankfurt’s DAX 30 dropped 0.30 per cent to 9,735.65 points and the CAC 40 in Paris slid 0.71 per cent to 4,221.99.
The euro slumped to $1.1868, the lowest level since March 2006, before recovering to $US1.1950. That compared with $US1.2002 late on Friday in New York.
‘It’s a new year but it’s the same old story… Eurozone jitters get markets wobbling again,’ said Jonathan Sudaria, a dealer at London Capital Group.
French President Francois Hollande on Monday urged Greece to abide by its European commitments, as the spectre of a Greek exit from the eurozone rears its head again.
Hollande’s comments came amid fresh political turmoil in Greece ahead of an election on January 25 that could be won by a far-left party.
Over the weekend, the Der Spiegel weekly quoted German government sources as saying that Berlin sees a Greek exit from the eurozone as ‘almost inevitable’ should the radical leftist Syriza party win the snap poll.
The euro’s losses meanwhile added to a sell-off on Friday that came in response to an interview with European Central Bank chief Mario Draghi in German business daily Handelsblatt.
Draghi had said that deflation was a threat to the eurozone and the ECB needs to be prepared to counter it. He added that the risk that the central bank will not be able to push inflation up ‘has increased compared to six months ago’.
Political turmoil in Greece also weighed on the euro.
With a general election set for January 25, the head of the radical leftist Syriza party said Saturday that if he won he would start ‘necessary change’ in Europe and end painful austerity policies.
Markets see a rollback of measures required under an IMF-EU bailout of the country as further weakening the eurozone economy.
European stock markets slide at open 25 june 2018
London:Europe's main stock markets dropped 0.7 percent in opening deals on Monday, as investors worried over the festering global trade...
