Greek snap election and weak Japanese data send global markets down

European markets took a pounding yesterday as the Greek prime minister called a snap election after failing to push through the necessary reforms to stay on track for the nation’s bailout package.

Stocks in Greece plummeted 10 per cent, and that was followed up by German imports falling 3.1 per cent – almost twice as far as expected.

That sent all the main European markets down by about 2 per cent for the day.

However, Teutonic exports contracted just 0.5 per cent, rather than the predicted 1.7 per cent shrinkage.

All of the larger European markets have since ticked up.

The UK got off to a bad start with Tesco punished with a 15 per cent drop after another profit warning, before closing at a 6 per cent decline.

Uncertainty from Europe also hit the FTSE, which ended the day down 2.1 per cent at 6,529.

The Nikkei 225 finished off 2.3 per cent after the release of a gloomy Japanese manufacturing survey.

China’s official inflation rate reached a five-year low of 1.4 per cent in November, a 20 basis point drop on the previous month, sparking greater fears about the nation’s slowing growth.

The Shanghai exchange took a 5 per cent drop, its largest drop in more than five years, although it has since recovered 2.9 per cent.

US markets were relatively robust throughout the turmoil ending mostly flat. Tech platform Nasdaq was the strongest performer with a 0.6 per cent gain.