After strong gains in the previous session, international markets slumped overnight after ratings agencies Fitch and Moody’s reaffirmed their gloomy outlook for Europe despite the developments at the weekend’s summit.
The agencies said the summit had done little to ease pressure on the region’s struggling economies which remain at risk of credit downgrades, providing a reality check for markets.
In Europe the FTSE shed 101 points (-1.8%) to settle at 5428, whilst the CAC (-2.6%) and DAX (-3.4%) suffered even heavier falls.
Stateside, the Dow Jones lost 161 points (-1.3%) to settle at 12023, whilst the broader S&P (-2%) and Nasdaq (-1.3%) also took hefty hits.
The euro and Swiss franc fell against the greenback as concern that European leaders have failed to find a solution to the region’s crisis spurred demand for assets with fewer ties to the euro area.
Gold futures fell 2.6%, to US$1,671 an ounce, whilst crude oil declined 1.4% to US$98.04 a barrel.
Today’s session will bring us data in the form of NAB business confidence and housing starts, both slated for release at 11:30am, AEDT.