LONDON: US stock markets on Monday suffered their biggest fall in two years as fears that Greece could drop out of the eurozone spread across the world.
The Dow Jones Industrial Average ended the day down 2% to 17,597 points – the biggest one-day fall since June 2013 and wiping out all of the gains made so far in 2015. The Nasdaq andS&P 500 also suffered heavy losses, closing down 2.4% and 2.1%, respectively. Financial and consumer-focused businesses suffered the largest losses.
The collapse in US markets, which tumbled just before the markets closed on Monday, follows even bigger falls in markets across Europe. Stocks fell 3.7% in France and 3.6% in Germany. The FTSE 100 in London also lost 2%. European banking shares were the hardest hit, suffering losses of up to 10%. Greece’s stock market was closed.
“With negotiations halted, the Greek situation has rapidly moved to the worst-case scenario, and investors who jumped to the conclusion last week that a deal was done will be suffering significant losses,” Alastair George, chief strategist at Edison Investment Research, said. “From here there is no quick fix – a referendum in favor of the government’s position leads directly to Grexit [a Greek exit from the eurozone] in our view.”
