LONDON (AP) — Global stocks slid further Monday due to renewed concerns about the eurozone’s debt crisis and after a dismal jobs report in the U.S. last week rekindled concerns about the recovery in the world’s largest economy.
Shares in Europe and the U.S. tumbled Friday after Washington announced that the American economy created just 18,000 jobs in June — a fraction of the figure expected. Asian markets followed the trend when they opened Monday.
The downbeat sentiment in markets was worsened by indications that Europe’s debt crisis might be spreading beyond the three countries that have already received rescue packages. There have been mounting concerns that after Greece, Ireland and Portugal, much-larger Spain could need a bailout to manage its tremendous debt load.
Now it seems Italy, the eurozone’s third-largest economy, could also be infected. The Milan Stock Exchange plunged 3.5 percent on Friday and continued its downslide on Monday. The spread between the country’s 10-year bond yields and Germany’s — considered the eurozone’s benchmark — reached a record high last week.
In an effort to contain such contagion, eurozone officials were meeting Monday to figure out how to get banks to participate in the next rescue of Greece. Those negotiations have been plagued by threats from ratings agencies that they would consider a bank rollover of Greek debt a default.
“It’s fair to say that sentiment was shot to pieces by the much-worse-than-expected non-farm payrolls data on Friday, and with concern that the European debt crisis could spread to Italy there’s no real incentive to treat this weakness as a time for bargain hunting,” said Yusuf Heusen, a sales trader with IG Index.
Those worries are also weighing on the euro. The currency shared by 17 countries was down 0.6 percent to $1.4120.
On Monday morning in Europe, France’s CAC-40 fell 1.5 percent to 3,857, while Germany’s DAX lost 1 percent to 7,325. The FTSE index of leading British shares was down 0.3 percent to 5,971.
Wall Street was also poised to continue its slide. Dow futures were down 0.7 percent to 12,532, and S&P futures were 0.9 percent lower at 1,330.
One of the biggest losers has been British Sky Broadcasting, whose shares tumbled for the second day in a row. A steep decline began when the British government called into question a takeover of the satellite broadcaster by News Corp. Rupert Murdoch’s News Corp. is under scrutiny and was forced to shutter one of its newspapers last week after revelations that the publication had hacked into the phones of crime and terrorism victims.
BSkyB’s stock was down 5.5 percent to 709 pence ($11.32) on Monday. Just a week ago, BSkyB’s shares were trading as high as 850 pence.
Earlier in Asia, Japan’s Nikkei 225 stock average lost 0.7 percent to 10,069.53 and Hong Kong’s Hang Seng retreated 1.7 percent to 22,347.23. South Korea’s Kospi fell 1.1 percent to 2,157.16.
Also dragging sentiment was data released Saturday showing China’s inflation accelerated to a three-year high in June even as the overheated economy began to cool. The Shanghai Composite index edged up 0.2 percent to 2,802.69.
The news that the global economy is still struggling pushed oil prices down Monday.
Benchmark oil for August delivery was down more than 1 percent to $95 a barrel in electronic trading on the New York Mercantile Exchange.