7 May 2012

Markets down after French and Greek elections

10:35 pm on 7 May 2012

Stock markets have reacted negatively to election results in France and Greece, amid uncertainty about the viability of austerity measures and fiscal discipline the previous governments had introduced.

At the start of trade on Monday, European markets began trading with falls, with most losing 1% to 2%.

The euro declined on the foreign exchanges and Asian markets also fell. Japan's Nikkei index fell 2.3% and Australia's ASX 200 index dropped 1.3%.

The French presidential election was won by Socialist candidate Francois Hollande, who wants to put more emphasis on growth in Europe and less on reducing government borrowing, the BBC reports.

The result in Greece is probably more unsettling for markets.

Losses suffered by the mainstream parties strengthen doubts about whether Greece will implement policies required for international bailout loans.

The Athens stock exchange was down 7.7% in early trading.