Uncertainty spooks equities

Global stocks slid and the euro fell to a four-month low yesterday as a political impasse in Greece heralded a potential exit for the country from the Eurozone, while a move to prop up lending in China and poor European data pointed to slower world growth. European stock markets closed sharply lower yesterday, with London's benchmark FTSE 100 index of top companies losing 1.97 per cent to 5,465.52. In Frankfurt, the DAX 30 dropped 1.94 per cent to 6,451.97 and in Paris the CAC 40 fell 2.29 per cent to 3,057.99. Safe-haven currencies, including the dollar and the Japanese yen, rose and government debt gained as coalition talks in Greece on Sunday proved fruitless, increasing the chance of another election in mid-June. Asian shares ended lower. Key benchmark indices in Hong Kong, Singapore, China, South Korea and Taiwan were down by 0.18 per cent to 1.15 per cent. While India's Sensex slipped 77 points, Japan's Nikkei 225 rose 0.23 per cent. Expectations are for the euro to continue falling, driven by speculation over the implications of Greece's possible exit from the Eurozone, said Eric Theoret, currency strategist at Scotiabank in Toronto. "The probability of a euro exit [by Greece] has risen in the past few hours," said Thomas Costerg, an economist at Standard Chartered Bank. "Fragility elsewhere in the Euro-area means that contagion from a Greek exit could be damaging." European shares sank about 2 per cent to their lowest levels in more than four months. The pan-European FTSEurofirst 300 index hit its lowest point since late Dec-ember at 998.93, and the Euro STOXX 50 index of Eurozone blue chips fell as far as 2,194.35. Stocks on Wall Street opened almost 1 per cent lower. The Dow Jones industrial average was down 100.28 points, or 0.78 per cent, at 12,720.32. The Standard & Poor's 500 Index was down 12.35 points, or 0.91 per cent, at 1,341.04. The Nasdaq Composite Index was down 24.38 points, or 0.83 per cent, at 2,909.44.