Asian stocks fell on Monday after budget talks in the Netherlands collapsed over the weekend and a Socialist who wants to put France’s austerity plans in reverse won the first round of the country’s presidential election.
Japan’s Nikkei 225 index fell 0.3 per cent to 9,533.48, as a strengthening yen hurt high-tech exporters. Hong Kong’s Hang Seng lost 0.7 per cent to 20,871.23 and South Korea’s Kospi fell 0.3 per cent to 1,969.69. Australia’s S&P/ASX 200 dropped 0.2 per cent to 4,357.70.
Over the weekend, Dutch lawmakers failed to resolve differences over budget cuts needed to bring the Dutch deficit back within the European Union limit of 3 per cent of gross domestic product.
The government is expected to resign within the coming days and call elections later this year, making it the latest European government forced out of office by the continent’s financial crisis.
Markets were also rattled by first-round results in France’s presidential election. Socialist candidate Francois Hollande garnered more votes than incumbent conservative President Nicolas Sarkozy.
If Hollande wins a second-round election May 6, economists fear those steps would upset France’s delicate cooperation with Germany that has been key to Europe’s efforts to resolve its financial crisis.
U.S. stocks rose on Friday on the back of stronger profits from Microsoft, McDonald’s and other major U.S. corporations.
The Dow Jones industrial average rose 0.5 per cent to close at 13,029.26. The Standard & Poor’s 500 index rose 0.1 per cent to 1,378.53. The Nasdaq composite index fell 0.2 per cent to 3,000.45.
In energy trading, benchmark oil for June delivery was down 13 cents to $103.75 a barrel Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.16 to settle at $103.88 in New York on Friday.
The euro fell to $1.3187 from $1.3215 late Friday in New York. The dollar fell to 81.27 yen from 81.58 yen.
