EU shares pick up after election fears subside

Published:  8 May at 6 PM

As reported by the BBC, EU shares ended higher as investor anxiety over national austerity plans after weekend election results proved to be only short-lived. Pro-bailout factions in Greece fared quite poorly, while Francois Hollande was elected France’s new president, promising to concentrate on growth rather than on austerity measures.

The Cac 40 in Paris recovered, trading up by 1.65 percent, while the Dax in Germany dropped by over 2 percent, but closed up by 0.1 percent. The euro also dropped against both the pound and the dollar.

The euro dropped to $1.295 -- its lowest rate since January, but later recovered to $1.305. It then fell against the pound to three-year lows. Shares in Athens also dropped by 8.3 percent, while London markets were closed due to a bank holiday.

The Dow Jones in New York opened up down by 0.3 percent, while some government debt interest rates have also risen, indicating a drop in investor confidence. The yield for secondary markets in the Greek 10-year bonds market has increased from 20 percent to 22.2 percent.

Asian markets also dropped, with Tokyo’s Nikkei dropping by 2.8 percent. South Korea's Kospi also declined by 1.8 percent and Hong Kong's Hang Seng fell by 2.4%.

The socialist Pasok party in Greece witnessed an unexpectedly low result, while the Syriza party, which is opposed to austerity measures, performed strongly.