A roundup of trading on major world markets:
NEW YORK – US stocks plunged Monday amid renewed worries about the eurozone debt crisis, which claimed its first major US casualty — a key brokerage that filed for bankruptcy.
On the last day of trading in October, stocks were under pressure from the start as worries grew that the long-awaited European Union deal addressing the eurozone debt crisis, whose delivery Thursday sparked huge market rallies, was short on details.
Market jitters were further heightened after embattled Greek Prime Minister George Papandreou called Monday for a confidence vote and a referendum on last week’s EU debt deal, taking a political gamble to silence growing opposition to his policies.
The Dow Jones Industrial Average skidded 276.10 points (2.26 per cent) to finish at 11,955.01.
The Nasdaq Composite tumbled 52.74 points (1.93 per cent) to 2,684.41, while the S&P 500 index, a broader measure of the markets, slid 31.78 points (2.47 per cent) to 1,253.30.
Financials were under attack amid the eurozone worries and after brokerage MF Global filed for bankruptcy protection following a string of losses from European public debt holdings.
Trading in MF shares had been suspended early Monday in anticipation of the bankruptcy filing.
But attention immediately turned to JPMorgan Chase and subsidiaries of Deutsche Bank, after MF’s bankruptcy filing showed those firms to be its two biggest creditors.
JPMorgan was said to have a claim of more than $US1.2 billion ($A1.12 billion) with MF linked to bond holdings, while Deutsche Bank had a claim of more than $US1.0 billion ($A936.02 million).
Shares in JPMorgan dropped 5.3 per cent on the news while Deutsche Bank’s US-listed shares plunged 11.5 per cent.
The bond market rallied.
The yield on the 10-year Treasury dropped to 2.18 per cent from 2.31 per cent Friday, while that on the 30-year Treasury fell to 3.20 per cent from 3.35 per cent.
LONDON – European stock markets and the euro fell sharply as investors retreated from bank shares on concerns the EU debt crisis accord may come up well short of initial expectations.
In London, the FTSE-100 index of top companies lost 2.77 per cent to 5,544.22 points, the Paris CAC-40 tumbled 3.16 per cent to 3,242.84 points and in Frankfurt the DAX 30 shed 3.23 per cent to 6,141.34 points.
Elsewhere in Europe, Milan slid 3.82 per cent, Madrid 2.92 lost per cent, Lisbon 1.27 per cent, Amsterdam 1.76 per cent and Zurich 2.07 per cent.
Dealers said there was plenty of room to take profits on last week’s gains made in a huge relief rally over Thursday’s debt accord as a lack of detail in the plan offered a good incentive for investors to pull back.
After the initial euphoria, the markets now want to see some real follow up on the deal and a jump in Italian borrowing rates reflected the underlying nervousness.
The banks suffered on concerns over their holdings of weak eurozone governments’ debt, with the offer of capital last week to help bolster their balance sheets not finding much favour from investors wary of state interference.
In foreign exchange deals, the euro fell to $US1.3927 from $US1.4156 late on Friday.
The dollar climbed to 77.99 yen from 75.81 yen on Friday as Japan stepped in to weaken its currency after it hit a fresh post-war high against the US unit of 75.32 yen.
HONG KONG – Asian shares fell following last week’s Europe-inspired rally, with Tokyo losing earlier gains despite a government forex intervention when the yen hit a new record against the dollar.
Tokyo fell 0.69 per cent, or 62.08 points, to 8,988.39, Sydney closed 1.27 per cent, or 55.2 points, off at 4,298.1 and Seoul fell 1.06 per cent, or 20.45 points, lower at 1,909.03.
Hong Kong fell 0.77 per cent, or 154.37 points, to end at 19,864.87 and Shanghai was 0.21 per cent off, or 5.16 points, at 2,468.25.
The Japanese index had moved into positive territory in early afternoon after the government stepped into the currency markets to sell the yen, which hit another record high against the US dollar.
The dollar rose to Y78.69 in afternoon trade after sinking to a post-war low of Y75.32 in the morning.
However, the effects of the intervention wore off equity markets, despite the dollar holding up.
It was the first intervention since August as the government tries to protect Japan’s exporters, who are hurt by the strong currency which makes their goods more expensive overseas.
The euro was at $US1.4020 ($A1.31), from $US1.4147 ($A1.32) late Friday in New York, and at Y110.33, from Y107.29.
In Sydney, shares in Qantas closed 4.4 per cent higher following an industrial tribunal’s order to an end to a bitter labour row that led to the grounding of the Australian airline’s entire fleet.
WELLINGTON – Wellington closed 0.21 per cent, or 6.96 points, higher at 3,332.58.
