Strife in the Eurozone hits markets

Julian Harris
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POLITICAL upheaval and gloomy economic data knocked markets in Europe yesterday, as investors grow increasingly concerned with the outlook for the continent.

A business survey for the Eurozone showed an even faster pace of recession than expected, dampening early sentiment. The mood was worsened by news of Dutch Prime Minister Mark Rutte tendering his resignation, after the coalition government collapsed over austerity talks.

The expected success of socialist Francois Hollande in France’s presidential election had already ensured a dismal start to the week.

The spread between French and German bonds widened to 147 basis points, while credit default swaps climbed in Holland.

The pan-European FTSEurofirst 300 lost 2.3 per cent, falling to a level not seen since mid-January.

The bearish mood also affected commodities, with Brent crude down 0.56 per cent and copper losing 1.97 per cent. Gold prices eased to $1630.89 an ounce, extending the more than two per cent losses it has posted so far this month.