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European stocks dropped after the leader of Greece’s biggest political party failed to reach an agreement on a new government following the weekend’s elections.
The euro weakened for a seventh day as Antonis Samaras, the leader of the New Democracy party in Greece, said he failed to reach an agreement to form a government. Alexis Tsipras, the head of Syriza, the second-biggest party, will now attempt to form a coalition government of left-wing parties. Tsipras said he wouldn’t agree to join forces with New Democracy and Pasok, the two Greek parties that have supported austerity measures in return for international funds, while saying a left-wing coalition government would nationalize banks to spur growth, repeal recent labor reforms and immediately cancel the bailout accords, he said.
National benchmark indexes fell in every western-European market except Iceland and Portugal. France’s CAC 40 slid 2.8 percent, the U.K.’s FTSE 100 fell 1.8 percent and Germany’s DAX dropped 1.9 percent. Greece’s ASE Index plunged 3.6 percent to its lowest close since 1992.
National Bank of Greece, the country’s biggest lender, tumbled 8.4 percent to 1.42 euros, extending yesterday’s 8.3 percent slump. Alpha Bank, Greece’s second-largest lender, sank 14 percent to 72 euro cents and EFG Eurobank Ergasias SA dropped 10 percent to 46 cents.
Elsewhere, BNP Paribas SA, France’s biggest lender, slipped 3.8 percent to 29.07 euros, Banca Monte dei Paschi di Siena SpA, Italy’s third-largest bank, slid 4.3 percent to 25.08 euro cents and Germany’s Commerzbank AG lost 3.4 percent to 1.53 euros.
In Madrid, Bankia tumbled 4.8 percent to 2.26 euros as Spain’s economy ministry today denied that the state has seized the third-largest lender in the country.
U.K. builders retreated as a house-price index fell in April, the Royal Institution of Chartered Surveyors said. The gauge dropped to minus 19 from minus 11 in March, according to RICS, which conducts a monthly poll of property surveyors across the country. A reading below zero means more surveyors saw price drops than gains last month.
Taylor Wimpey dropped 6.3 percent to 44.67 pence, Barratt Developments Plc lost 5.3 percent to 117.7 pence and Persimmon Plc declined 4.4 percent to 563.5 pence.
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