SHANGHAI, May 16 (SMM) -- As concerns over Greece's policital and economic outlook dominate the market, major global equity markets weakened recently. CRB's commodity price index has fallen to a two-year low, which monitors prices for agricultural products, energy, industry products and precious metals. Falling commodity prices forced investors to adjust investment plans, and prices will unlikely stop declines in the short term as large numbers of market players trade with lower prices.
Greece's president announced May 15th that the negotiation of party leaders to form a coalition government failed, and Greece will launch another general election in June. 7 parties participated in the parliamentary election taking place in May 6th, but none won the majority. The top three parties in the voting result tried to form the coalition government in turn, and the President made efforts to form the cabinet but failed. In the negotiation, the New Democracy Party, Pan-Hellenistic Socialist Movement and Democratic Left Party advised to renegotiate certain clauses in the two bailout agreements, and progressively stop the bailout agreements, while the left wing political parties and the independent Greek party opposed the bailout agreements. Since the debt crisis, eurozone countries and the IMF have supported Greece with bailout loans twice to help Greece avoid debt defaults. According to the bailout agreements, Greece pledged to implement credit tightening measures and reforms, which led to economic recession and significantly affected Greek lives. If the party opposing credit tightening policies wins in the new general election, Greece will likely be forced out of the euro zone.
US Commerce Department announced US retail sales values during April were up 0.1% MoM, better than forecast of the market. US CPI remained unchanged from the previous month, in line with market expectations. Concerns over Greece's problems offset better-than-forecast economic data. In this context, US stocks markets plunged, with the Dow Jones Industrial Average down 63.35 to close at 12,632.00. S & P 500 Index fell 7.69 to close at 1,330.66, and Nasdaq Composite Index dropped 8.82 to close at 2,893.76. Commodity prices plummeted further, with light crude oil futures prices for June delivery on the COMEX fell by 80 cents to close at USD 93.98/bbl. Gold prices continued to fall to a record low for the year. Gold contract prices for June delivery closed at USD 1,557.1/oz, down USD 3.9/mt or 0.25%.
In general, Shanghai metals prices should continue to fall affected by political turmoil and concerns over domestic economic slides. Although domestic spot prices were lowered, demand did not improve.