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Apr 23, 2012, 07.46 PM IST
MARKETS-GLOBAL:Global stocks, euro sink on euro zone fears
By Luciana Lopez
NEW YORK (Reuters) - Global stocks and the euro slid on Monday as investors, rattled by a slump in the euro zone's private sector and a Dutch budget crisis, rushed to perceived safe havens such as the dollar.
With the Dutch government set to resign on Monday in an impasse over budget cuts and dismal PMI figures from the euro zone, economists worried that the region's economy will stay in recession until the second half of the year.
Wal-Mart Stores Inc sank more than 4 percent after the New York Times reported officials at the retailer stymied an internal investigation into allegations of extensive bribery at its Mexican subsidiary.
European stocks fell, as well, with the FTSE Eurofirst index of top European shares off 2.17 percent, after having posted its best week in a month. The euro fell against both the dollar and the yen, dropping 0.68 percent to $1.3131 and 1.17 percent to 106.50 yen.
"Our base case scenario is still for a gradual return to modestly positive growth in the second half of this year, but with the lingering debt crisis and the ongoing drag from fiscal policy, the risks are clearly skewed to a more protracted recession," said Martin van Vliet of ING, speaking of the euro zone.
Dutch and peripheral euro zone bonds sold off, driving Spanish yields back above 6 percent and taking the spread of Dutch bonds over German benchmarks to its highest in three years.
Adding to the uncertainty, anti-immigration crusader Marine Le Pen surged to a third-place finish in the first-round of the French presidential elections; stealing the show from the two front runners the Socialist front-runner Francois Hollande and incumbent Nicolas Sarkozy.
(Additional reporting by Richard Hubbard in London; Editing by Theodore d'Afflisio)
May 22 2013, 13:11
- in MARKET OUTLOOK
May 22 2013, 10:44
- in Economy