Global markets resumed their slump overnight, amid investors’ worries about Europe’s debt crisis which outweighed upbeat US domestic manufacturing and housing data.
Eurozone worries persist
In Europe the FTSE 100 shed 63 points (-1.1%) to settle at 5451, whilst the French CAC (-2.2%) and German DAX (-2.1%) suffered even heavier falls.
Spain made a formal request for EU aid to bail out its banks, but details about the plan, including the specific sum it would involve, remain unclear.
Stateside, the Dow Jones slumped 138 points (-1.1%) to settle at 12503, whilst the S&P (-1.6%) and NASDAQ (-2%) were even weaker.
Better-than-expected data did little to improve sentiment on Wall Street.
New single-family home sales in May grew by 7.6% from April to a seasonally adjusted annual rate of 369,000 – the highest rate in more than two years and more than economists had forecast.
The Federal Reserve Board of Dallas reported that business activity in its region jumped this month, up 5.8 after dropping 5.1 last month as the production index surged to 15.5 from 5.5.
The Aussie dollar lost ground but held above parity and is currently buying US$1.001, whilst the euro weakened before a European Union summit later this week and as Italy and Spain prepare to sell debt.
Oil fell below $80 a barrel on concern that a meeting of European Union leaders this week will fail to check the region’s debt crisis, leading to a reduction in fuel demand.
Crude for August delivery declined 55 cents to settle at $79.21 a barrel on the NYMEX. Futures are down 20% this year.
Elsewhere, copper added 0.4% whilst gold added 1.2% to settle at US$1586 an ounce.
There is no major local economic data due out for today’s session.