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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: dalroi who wrote (89351)	4/23/2012 11:41:15 AM
From: elmatador	Respond to of 219422

Eurozone angst spooks investors By Hugh Carnegy in Paris, Matt Steinglass in Amsterdam and FT Markets reporters Markets reacted nervously on Monday to the socialists’ first-round victory in France’s presidential election, as the eurozone crisis claimed another victim on Monday with the collapse of the Dutch government. Analysis of François Hollande’s early lead – and the strategy he and Nicolas Sarkozy might adopt towards the far-right National Front’s unexpectedly large support – came amid a flood of statistical data underlining the tenacity of the eurozone’s problems.The European Union’s statistics office said that although the 17 member states of the eurozone had reduced their deficits from 6.2 per cent of gross domestic product in 2010 to 4.1 per cent in 2011, overall indebtedness still rose 1.9 percentage points to 87.2 per cent of GDP – the highest since the euro was created in 1999. In the Netherlands, Mark Rutte, prime minister, tendered his government’s resignation at a meeting with Queen Beatrix, clearing the way for elections. That sent the euro down to $1.3105 against the dollar, a session low. Market concerns across Europe centred on the fact that action to deal with the eurozone crisis, in which France has played a crucial role, could be complicated if Mr Hollande achieves victory in next month’s decisive second round. To do so, he would have to win votes from those cast for defeated first-round candidates, notably the 18 per cent cast for Marine Le Pen, the National Front candidate. An opinion poll on Sunday showing Mr Hollande’s lead over Mr Sarkozy narrowing from 12 percentage points to 8 percentage points also suggested that almost all those who backed Jean-Luc Mélenchon, of the Left Front – who won 11.1 per cent of the vote – would shift their support to Mr Hollande in the second round. A handful of Le Pen supporters would do likewise, while 60 per cent said they would back Mr Sarkozy. France’s financial markets came under pressure and French borrowing costs rose, with the spread between yields on French and German 10-year government bonds reaching 146.9 basis points, as Bund yields hit a record low of 1.634 per cent. The CAC 40 benchmark French stock market index dropped 2.4 per cent. The DAX index in Frankfurt fell 3.3 per cent by 3pm BST (4pm CET) to its lowest level since early February. Meanwhile, the Netherlands was thrown into political crisis after far-right politician Geert Wilders withdrew his support for budget cuts aimed at meeting EU deficit limits. The move has raised uncertainty over whether the Netherlands will be able to cut its projected 2013 budget by the €15bn needed to meet the EU target. Yields on the benchmark Dutch 10-year bond rose 6 basis points to 2.37 per cent. Broader markets were also reflecting investor concerns, with FTSE Eurofirst 300 index stocks down 2.1 per cent as financials were hit. Spain’s Ibex 35 index fell 2.9 per cent to stand just half a percentage point above its lowest close in more than nine years. The S&P 500 slipped 0.6 per cent on opening and was down by 1.3 per cent at 3pm BST (10am EDT). Copyright The Financial Times Limited 2012. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web