Sharp falls on Wall Street continued recent stock market woe, amid fears that Europe's debt crisis might be spreading to larger economies.
Escalating fears about Europe's debt crisis led to rocky trading around the world, as the Spanish government's battering at the hands of its voters stoked investors' doubts as to whether Madrid will be able to carry out their painful spending cuts as planned.
On Monday, the FTSE 100 closed down almost 2pc at 5,835.89 points, while the CAC 40 in Paris fell 2.1pc to 3,906.98 after the defeat of Spain's ruling Socialist party in local elections raised questions as to whether the economy deemed "too big to bail" can implement the necessary austerity measures.
In the US, the Dow Jones Industrial Average closed down 1.05pc at 12381.26. "What is clearly unnerving markets at the moment is just how unquantifiable the eurozone crisis still is," said David Jones, chief market strategist at IG Index.
The euro touched a record low against the Swiss franc and a two-month low against the dollar. Against the pound, the euro 0.4p to 86.99p. In contrast, the price of gold rallied to its highest in almost a fortnight, as investors took flight and looked to hedge their exposure to the risk that one of the eurozone's stragglers will default on its debt.
Spain's voter protest spooked investors already nervous about the prospect of electorates derailing bail-out plans and austerity packages for stricken European nations, as voters in the eurozone's successful economies resent what they view as hand-outs and those in struggling economies protest harsh fiscal reforms.
The Telegraph
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http://www.telegraph.co.uk/finance/economics/gilts/8531830/Global-stock-markets-fall-as-Spain-default-fears-grow.html
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