World stocks tumble over Greek crisis

World stocks tumble over Greek crisis

World stocks dived today after a failure by Greece’s political leaders to form a coalition government set the stage for new elections next month, keeping Europe’s debt crisis centre stage.

The turmoil in Greece sent European shares lower in early trading. Britain’s FTSE 100 fell 0.9% to 5,388.93 and Germany’s DAX slid 1% to 6,335.93. France’s CAC-40 was down 0.4% at 2,036.30.

Wall Street was also headed for a lower opening, with Dow Jones industrial futures losing 0.1% to 12,589. S&P 500 futures were 0.2% down at 1,325.90.

Asian benchmarks recorded sharp losses earlier in the day.

Japan’s Nikkei 225 index dropped 1.1% to close at 8,801.17, its lowest close since January 30, amid discouraging economic news. Core private-sector machinery orders fell 2.8% in March, the first drop in three months, Japan’s Cabinet Office said.

Hong Kong’s Hang Seng plummeted 3.2% to 19,259.83 and South Korea’s Kospi fell 3.1% to 1,840.53. Australia’s S&P/ASX 200 lost 2.4% to 4,165.50 amid sliding commodities prices.

Newly elected Greek leaders – hotly divided over how to resolve the country’s economic crisis – failed yesterday to form a new government. That means new elections must be held in June.

Some investors fear a win by parties that oppose unpopular austerity measures necessary for Greece to qualify for urgently needed bailout money. Without the money, the country would probably default on its debt and leave the euro.

“The Greek crisis will continue to frustrate markets, keeping sentiment under pressure,” analysts at Credit Agricole CIB in Hong Kong said.

Mainland Chinese shares also lost ground, with the benchmark Shanghai Composite Index falling 1.2% to 2,346.19. The Shenzhen Composite Index dropped 1.4% to 942.04. Shares in real estate, cement producers, furniture makers and financial companies weakened.

Elsewhere, blue-chip shares across sectors throughout Asia registered sharp losses. South Korean electronics giant Samsung plunged 6.2% and Hyundai shed 4%. In Japan, Toyota lost 2.1%. Nomura lost 1.5%.

Shares of major Chinese shipping companies plummeted amid fears of weakness in Europe, a critical export market. Hong Kong-listed China Shipping Container Lines Co. sank 5.2%. China Cosco Holdings dropped 3.7%.

“The Chinese shipping sector is down sharply and continues to downtrend,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “The market is not good right now, but I expect a technical rebound is coming.”

Falling commodities prices hurt Australia’s mining sector. BHP Billiton, the world’s largest mining company, lost 4.1%. Rio Tinto was down 3.9%. Paladin Energy tumbled 9.3%.

Benchmark oil fell 1.56 dollars to 92.42 dollars per barrel in electronic trading on the New York Mercantile Exchange.

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