European markets fell Monday as investor sentiment turned negative with the revival of concerns over the debt crisis affecting the euro zone following the continuing financial instability in Greece and the delay in Spain asking for a bailout officially.
The French CAC 40 index was down 1.01 percent or 35.04 points to 3422. Shares of AXA SA fell 2.26 percent and those of Renault SA dropped 1.92 percent.
London’s FTSE 100 index fell 0.61 percent or 35.66 points to 5835.36. Shares of Evraz Plc dropped 2.28 percent and those of Fresnillo Plc were down 2.54 percent.
The German DAX 30 index declined 0.84 percent or 62.03 points to 7335.84. Shares of Daimler AG fell 1.53 percent and shares of Bayer AG dropped 1.16 percent.
Spain's IBEX 35 was down 0.58 percent or 45.80 points to 7908.60. Shares of Bankia SA fell 2.64 percent and those of Acciona SA dropped 1.66 percent.
Talks between Greece and the Troika, which consists of the European Commission, the European Central Bank and the International Monetary Fund, will continue in Athens on the austerity measures to be implemented to receive the bailout fund.
On the fiscal front, Greece made some progress in its budget for 2013 with measures to reduce the deficit from 6.6 percent of GDP to 4.2 percent. But the Troika considers that the budget is too optimistic and the economy will shrink by as much as 5 percent next year. So there is the chance of the Troika going to ask for additional wage and pension cuts in return for signing off the fiscal package.
Meanwhile, hopes that Spain will soon ask for a bailout officially has faded with Prime Minister Mariyano Rajoy denying the need for a financial rescue. But the investors feel that it would be unwise if the government wait too longer. Market participants expect that Spain will ask for a bailout under the enhanced conditions credit line which will trigger the bond-purchasing operation by the ECB.