Greek conservative party supporters wave flags during a pre-election rally by their leader Antonis Samaras in the town of Thessaloniki May 2, 2012GRIGORIS SIAMIDIS
The Toronto stock market was negative Monday after elections in France and Greece over the weekend resulted in another round of uncertainty about Europe's debt crisis.
The S&P/TSX composite index lost 52.61 points to 11,808.35 as worries about worsening economic conditions in Europe and the U.S. hit commodity stocks in particular. The TSX Venture Exchange slipped 1.44 points to 1,403.61.
The Canadian dollar dipped 0.05 of a cent to 100.4 cents (U.S.) as traders avoided riskier assets like commodities and the loonie in favour of the safe-haven status of U.S. Treasuries. Another day of tumbling oil prices also depressed the commodity-sensitive currency.
U.S. markets were mainly lower with the Dow Jones industrials down 27.78 points to 13,010.49.
The Nasdaq composite index added 2.75 points to 2,959.09 and the S&P 500 index slipped 0.14 of a point to 1,368.96.
Final results showed socialist leader Francois Hollande narrowly defeated incumbent Nicholas Sarkozy with 51.62 per cent of the vote, ending 17 years of right wing government in France. Hollande campaigned on the need for more growth-generating economic policies and less reliance on austerity.
But investors were particularly worried by the election in Greece, which resulted in a split Parliament with no party likely to be able to form a government. The two parties that governed as a coalition for the past six months and pushed through tough austerity measures to secure crucial bailouts were pummelled to the benefit of more extreme parties of the right and left.
The socialist Pasok party suffered the biggest retreat. Its share of the vote collapsed from around 43 per cent in the last election in 2009 to a little over 13 per cent.
"The lack of a coalition between Greece's PASOK and New Democracy creates the unanswerable question of 'What happens next?,"' observed BMO Capital Markets senior economist Jennifer Lee.
"Both pro-austerity parties only won 32 per cent of the ballots so (they) need to woo the other parties to have a coalition, but that's not going to be easy."
A period of uncertainty looms for the bailed-out country, which is in its fifth year of recession and has over half its youth out of work following big spending cuts and tax increases in return for crucial international bailout funds.
Mining and energy companies led declines after crude lost more than seven per cent and copper almost three per cent last week amid worries about slowing economic conditions.
Demand concerns continued to pressure oil with the June contract on the New York Mercantile Exchange down $1.78 to $96.71 (U.S.) a barrel. The energy sector lost 1.35 per cent and Cenovus Energy declined 46 cents to $31.72 and Suncor Energy fell 32 cents to $29.87.
The base metals sector declined 3.22 per cent while copper prices were unchanged at $3.72 (U.S.) a pound. Teck Resources lost $1.03 to $33.76 and Ivanhoe Mines was down 15 cents to $10.41.
The gold sector surrendered early gains to lose about two per cent while bullion moved down $11.10 to $1,634.10 (U.S.) an ounce. IamGold Corp. faded 39 cents to $11.08 while Goldcorp Inc. lost 68 cents to $35.75.
The tech sector was also a drag with declines led by Research In Motion Ltd., down another 12 cents to $11.84. The loss follows a plunge of almost 14 per cent last week despite having revealed an early version of its new BlackBerry 10 operating system.
European bourses were mixed with Frankfurt's DAX off 0.15 per cent while the Paris CAC 40 edged up 1.7 per cent. U.K. markets were closed for a bank holiday.
The TSX tumbled three per cent last week amid soft manufacturing data from China and a disappointing employment Friday from the U.S. Worries about a deepening economic malaise in Europe has been further bad news for a resource intensive market like the TSX.
"The European economy is the biggest in the world when you put all those countries together," said Gareth Watson, vice president at GMP Richardson Limited.
"And if they are basically now in recession, you have the trifecta working against you in a commodity based market."
It was light on the earnings calendar Monday with Cargojet Inc. reporting that net income dropped to $30,000 or nil per share in the three months ended March 31. That compares to $1.3-million or 16 cents per share a year ago. Revenues weakened to $40.1-million from $41.1-million in the comparable period first-quarter results were affected by a continuation of declining volumes in its key overnight cargo services. Its shares slipped 14 cents to $8.01.