Stock markets and euro down on double-dip fears

European stock markets have opened lower, amid renewed fears of a double-dip recession.

The FTSE 100 declined by 1.6% in its opening minutes, while Asian markets also tumbled, with Japan’s Nikkei 225 closing down 3.8%.

Meanwhile, the euro dropped to its lowest level against the dollar in four years.

Fears were largely driven by disappointing US jobs data released on Friday.

Some 431,000 jobs were created in May, the US Labor Department said. However, analysts had expected 500,000 new jobs.

Other European markets also fell in the first hour of trading, with the German Dax index 1.3% lower and France’s Cac 40 down 1.9%.

The Nikkei had been down as much as 4% at one point, and its closing level marked its biggest daily fall in 14 months.

Hong Kong’s Hang Seng index also closed more than 2% lower.

BP bounce Hong Kong Stock Exchange trader Oil and gas stocks were particularly hard hit as energy prices tumbled

Oil and gas stocks have been particularly badly hit, amid worries that global energy demand may be slowing.

Japanese oil refining company JX Holdings was the biggest faller in Tokyo, down 8.3%.

The price of Brent crude oil dropped 8% late on Friday and over the weekend to $70.50, before recovering to around $71.50 on Monday morning.

Meanwhile, US light, sweet crude fell 7.8% to $69.50, before recovering to the $70 mark.

Despite this, BP bucked the falling market, jumping more than 3% at the start of trade on Monday, before giving up some of its gains.

The strong performance followed weekend news that the oil firm’s latest attempt to cap its leaking Gulf of Mexico oil well was succeeding.

Eurozone doubts

On currency markets, the euro dropped 2.8% over the weekend to $1.188, before rebounding above $1.19.

The single currency hit an 8-year low against the Japanese yen of just over 108 yen, before recovering above 109 yen.

Meanwhile, the pound continued to split the difference between the dollar and euro.

Against the dollar, sterling was down 1.85% to $1.44, while against the euro it was up 1.1% to 1.213 euros, its highest level since 2008.

As well as US job woes, market angst over the eurozone was piqued further on Friday afternoon.

In Hungary, a spokesman for the new prime minister claimed that the country faced a “Greek-style” financial crisis after the outgoing government had allegedly falsified data.

However, the Hungarian government has since been at pains to rephrase the comments after the country’s currency, the forint, dropped 6% against the dollar on the news.

Worries about the health of eurozone banks were also heightened by an unsubstantiated market rumour on Friday that French bank Societe Generale had suffered a big loss in its financial derivatives trading.

The bank said it had no comment to make about the rumour that saw its share price plummet 7.6% on Friday.