"Much ado about something" could have been a belletristic title for yesterday's trading session, which was a day for the books. The beginning of the week has been filled with figures and data across the major global stock markets, and none of them were good.
Several stock markets were open fronts, primarily in the Netherlands and France, where political news stood out most. On the one hand, the morning began with the news that the socialist candidate for Prime Minister of France, Francois Hollande, had defeated the incumbent Prime Minister Nicolas Sarkozy. What was most surprising was that 20% of Hollande's votes came from the extreme right, represented by the Frente Nacional party that is led by Marine Le Pen.
"The result of the elections in France casts doubt on the future of the euro zone. The power of the far right augurs a sensation of not only economic crisis, but also of social unrest," explained Soledad Pellón, a strategist at IG Markets.
In this sense, the humility expressed by the Netherlands' Prime Minister in confronting his inability to execute his country's national budget sounded the alarms for a country that, until now, has kept to the sidelines of the European sovereign debt crisis. This news helped put France's Cac 40, which fell back 2.83% yesterday, on the list of European stock indexes that have entered into negative territory for 2012.
