US Futures Plunge On Europe Fears, China Data

 
on April 23 2012 7:56 AM

Futures on major US indices point to a lower opening Monday as political uncertainty in France and the Netherlands, as well as mixed data from China, weighed on the sentiment.

Futures on the S&P 500 are down 1.05 percent, futures on the Dow Jones Industrial Average are down 0.98 percent and Nasdaq-100 futures are down 0.96 percent.

European stock markets plunged on political worries. Markets are currently trading lower with FTSE 100 down by 99.88 points, DAX30 down by 190.45 points and CAC40 down by 2.30 points.

Early elections look likely in the Netherlands after one of the coalition partners in the government withdrew due to differences over the 2013 budget. The move may lead to fresh elections, and it casts doubt on its support for future Eurozone measures.

In France, preliminary results confirmed that Socialist Francois Hollande, who intends to renegotiate the EU’s new fiscal pact, won 28.8 percent of the votes while President Nicolas Sarkozy got 26.1 percent, taking the election to a runoff. 

“The outcome was more or less as expected. At first glance Hollande would be a negative for markets, but he's the most realistic political option for France because if Sarkozy were to win it would mean a standstill for France,” Christian Stocker, strategist at UniCredit Global Research in Munich, told Reuters.

Meanwhile, the news from Asia also weighed on the sentiment. The preliminary HSBC China manufacturing purchasing managers index (PMI), which is a measure of the nation-wide manufacturing activity, improved to a two-month high of 49.1 in April compared to 48.3 in March.

However, the data failed to ease concerns of weakness in Asia's largest economy as the index continued to remain in the area of contraction for the sixth straight month, indicating that Chinese manufacturing sector remains in a soft spot.

On the earnings front, Netflix, Ameriprise Financial, Texas Instruments, Xerox Corp. and Sun Trusts Banks are due to report quarterly results. 

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