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Share indexes tumble in Europe, US

January 5, 2015

Global equity markets have taken a tumble, led by declines in energy stocks amid sliding oil prices. US crude dropped to a five-and-a-half year low, while European stocks were also pressured by worries about Greece.

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Traders are pictured at their desks in front of the German share price index DAX board at the Frankfurt stock exchange on January 5, 2015. REUTERS/Remote/Stringer
Image: Reuters

Stocks in Europe and the United States fell sharply on Monday, fueled by a decline in major energy stocks, with European stock markets additionally troubled by worries over the political outlook in Greece.

The euro hit $1.1864 in early trading, a nine-year-low, before recovering later to $1.1919. The drop was triggered by reports that German Chancellor Angela Merkel believed that the eurozone could cope with Greece leaving the common currency.

Her remarks came amid fears that a win by the anti-austerity Syriza party in upcoming elections in Greece could jeopardize Athens' place in the eurogroup. The party, which has taken the lead in opinion polls, wants to renegotiate the terms of the country's international bailout.

The 19-member eurozone's common currency has also been under pressure from expectations that the European Central Bank will step up measures providing monetary stimulus as the region's economy continues to struggle.

These factors, combined with a fall in major energy stocks, caused a tumble on Frankfurt's Dax, which closed 2.99 percent down at 9,473.16 points.

Britain's top equity index, the blue-chip FTSE, also took a knock, closing down two percent at 6,417.16 points. The UK Oil and Gas index fell 4.4 percent, with BP down 5.1 percent and Shell 4.1 percent.

The CAC 40 in Paris fell 3.31 percent to 4,111.36 points.

Sliding oil price

Across the Atlantic, stocks also fell as benchmark US crude went down $2.50 to $50.15 a barrel on the New York Mercantile exchange, with the price dipping to as low as $49.95. This continues a slide that began in June last year, when a barrel of oil was trading at $107.

The Standard and Poor's 500 index sank 32 points, or 1.5 percent, to 2,206 in midday trading. The decline was led by a 4 percent drop in energy stocks. Chevron fell $ 4.9, or 4.3 percent, to $107.72 and Exon Mobil dropped $2.90, or 3.1 percent. to $89.92.

The Dow Jones Industrial Average also fell 211 points, or 1.2 percent, by midday.

tj/shs (AP, AFP, Reuters)