Asian and European stock markets have shown clear signs of nervousness at the start of the new week. A tax on depositors' savings in Cyprus as agreed by international lenders on the weekend is causing alarm.
Asian Pacific stock markets fell Monday amid widespread worries over a Cyprus bailout package seen to escalate the eurozone crisis.
A tax on depositors' savings in Cyprus as agreed among international lenders and the government in Nicosia rattled investors who feared the move, if passed by parliament, could set a precedent for future euro area bailouts.
Japan's benchmark Nikkei 225 Stock Average lost 2.71 percent, while the broader-based Topix index was down 2.22 percent. Hong Kong's Hang Seng index dipped 2.15 percent, with Australia's S&P/ASX 200 also dropping by more than 2 percent.
Little trust in Brussels
European stocks also pointed downwards sharply in early Monday trading. London's FTSEurofirst 300 was down 1.2 percent minutes after trading started, with banking stocks easing by 2.4 percent. Germany's blue-chip DAX 30 was down about 1.5 percent within minutes.
The controversial tax is designed to help bolster the ailing banking sector in Cyprus and strengthen public finances. It is also a prerequisite for the nation to receive a 10 billion euro ($13 billion) bailout from international lenders. Cypriot President Nicos Anastasiades warned that without a rescue package the financial sector would collapse and plunge Cyprus into bankruptcy.
hg/dr (dpa, Reuters)