North American markets joined in a global sell-off Monday after Greece admitted it would miss its own deficit targets, despite introducing new austerity measures, increasing concerns that the country could default on its debt.
Canada's benchmark stock index, the S&P/TSX composite, was down 124.06 points, or one per cent, to 11,499.78 as the increasingly troubling European debt situation pushed oil prices lower on fears the crisis could spark another recession and financial meltdown, while investors dove into the traditional safe haven of gold.
Crude oil futures slipped $1.79 U.S. to $77.51 U.S. a barrel, while gold futures were trading around $1,658 U.S. an ounce, up $34.50 U.S..
"We expect the oil price to remain under pressure from both the ongoing eurozone debt crisis and the deteriorating global economy," Marc Ground, an analyst at Standard Bank, told Reuters. "Volatility is expected to remain elevated."
In the U.S., the Dow Jones industrial average fell 68.03 points, or 0.62 per cent, to 10,845.35, while the Nasdaq composite index dropped 18.30 points, or 0.76 per cent, to 2,397.10.
Monday's deficit news out of Athens comes as eurozone finance ministers are set to meet in Luxembourg to consider new efforts to resolve the region's growing sovereign debt mess.
"This news is disappointing but not surprising," Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York, told Reuters. "While I think they will get additional help if needed, there remains a lot of uncertainty over how much more money could be provided as well as the framework for a possible deal."
The Canadian dollar was trading at 95.17 cents U.S. earlier Monday, down from Friday's close of 95.40 cents U.S. — its lowest point since Sept. 7, 2010.
Overseas markets also tumbled Monday. In London, the FTSE 100 index was down 93.09 points, or 1.82 per cent, to 5,035.39 at midday. Frankfurt's DAX was off 159.03 points, or 2.89 per cent, to 5,342.99 and the Paris CAC had lost 71.54 points, or 2.40 per cent, to 2,910.42.
In Asia, Tokyo's Nikkei index closed at 8,545.48, down 154.81 points, or 1.78 per cent. Hong Kong's Heng Seng index — the only Chinese market open on Monday — ended at 16,822.15, down 770.26 points, or 4.38 per cent. Financial markets in mainland China are closed all this week for a national holiday.
In North American markets on Friday, the S&P/TSX dropped 62.48 points, closing at 11,623.84 — a loss of 0.53 per cent for the day and 8.9 per cent for the month — its worst one-month decline since October 2008, near the start of the downturn — and 12.6 per cent for the quarter. The index ended Friday 18.6 per cent below this year's April 5 high of 14,270.53.
The Dow Jones closed at 10,913.38, a loss of 240.60 points, or 2.16 per cent, while the Nasdaq fell 65.36 points, or 2.63 per cent, to 2,415.40.
