Asian stock markets plunged following the election results in France and Greece.
Many voters backed politicians who have come out against plans to cut state spending. It has stoked fears that efforts to slash eurozone debt levels may now unravel.
“People are nervous that the entire austerity package imposed by Merkel bascially will be overturned and that will create investor anxiety,” said Francis Lun, Managing Director of Lyncean Holdings.
Outgoing French president Nicolas Sarkozy played a leading role in forming bailout plans and austerity measures.
There may now be attempts to renegotiate those measures, but there is a feeling amongst some analysts that terms already signed up to will stay put.
Japan’s Nikkei 225 index fell 2.6 percent to 9,134.26, while the Hang Seng dropped 2.4 per cent to 20,582.24 in Hong Kong on Monday.