European stocks down on Greek political turmoil

Colleen Barry - The Associated Press

MILAN (AP) — European markets fell Tuesday as investors worried whether Greece, after an indecisive election, could form a new government to save it from financial disaster. After Greek conservatives failed to form a government, the baton passed to the Radical Left Coalition leader Alexis Tsipras. He is not expected to be able to form a governments either and another general election is looking increasingly likely.

Greek shares have borne the brunt of the concerns. After sliding nearly 7 percent on Monday, Athens' main stock exchange was down a further 1.3 percent by midday trading Tuesday.

"Greece's troubles will worsen if the job of forming a new government drags out and forces another round of elections," said Craig Erlam, an analyst at Alpari. Erlam warned that Greece could run out of money in June without a government to negotiate the next tranche of its financial bailout.

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May 08, 2012