Greece, markets sink into crisis

Shares across the world, oil and gold today took a hit due to the political turmoil in Greece.

The nation's Syriza party leader Alexis Tsipras, charged with forming a government, told his pro-bailout counterparts they must renounce support for the European Union-led rescue if there is to be any chance of forging a coalition. Tsipras said he expected Antonis Samaras of New Democracy and Evangelos Venizelos, the former finance minister who leads the Pasok party, to send a letter to the EU revoking their pledges to implement austerity measures by the time he meets with them tomorrow to discuss forming a coalition.

 

"I won't do this," said Samaras, whose party was the biggest after Sunday's shock election but was abandoned by many voters angered by the economic suffering imposed in exchange for a bailout that is saving Greece from bankruptcy.

The crisis hit global markets. US stocks fell, sending the Standard & Poor's 500 Index to its lowest level in two months. European shares sunk to a four-month closing low. Gold fell more than 2 per cent toward this year's lows. Oil fell for a fifth day, partly also because Saudi Arabian Oil Minister Ali al-Naimi said prices are too high. In the US, S&P 500 fell 1.1 per cent to 1,354.26 at 11:57 a.m. New York time.

The Dow Jones Industrial Average slid 1 per cent to 12,873.55 for a fifth day of losses. The Nasdaq Composite Index sank 1.3 per cent to 2,920.06, the lowest on a closing basis since March. The FTSEurofirst 300 provisionally closed down 1.7 per cent at 1,017.50, not far from its session low.

Spot gold dropped 2.4 per cent to $1,598.81 an ounce by 11:30 a.m. EDT (1530 GMT), having earlier hit a low of $1,594.94 an ounce, which marked the cheapest price since January 4.

Brent oil for June settlement dropped $2.04, or 1.8 per cent, to $111.12 a barrel on the London-based ICE Futures Europe exchange. Crude for June delivery fell $2.07, or 2.1 per cent, to $95.87 a barrel at 12:39 p.m. on the New York Mercantile Exchange.