05/06/2012 10:39 EDT | Updated 07/06/2012 05:12 EDT

Asia stocks plunge after Europe elections, disappointing US jobs data

BANGKOK - Asian stock markets were pummeled Monday by weekend election results in Greece and France that heightened uncertainty about Europe's ability to solve its debt crisis.

Signs of a faltering economic recovery in the U.S. compounded the dour mood while oil slid below $97 a barrel. Japan's Nikkei 225 index plunged 2.6 per cent to 9,134.26 and Hong Kong's Hang Seng slid 2.4 per cent to 20,582.24.

Election results in Greece sent tremors throughout Europe as voters punished the parties responsible for highly unpopular austerity measures instituted to prevent the country from defaulting on its massive debts.

No political party won enough votes to form a government — leaving the political and financial future of the recession-hit country in serious doubt.

Meanwhile, in France, President Nicolas Sarkozy lost to Socialist candidate Francois Hollande, who had criticized the country's austerity program and wants to boost government spending.

Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong, said the election results were likely to heighten political instability and market volatility.

"Thus, in the short run, risk aversion is the name of the game," he said in an email.

Elsewhere, Australia's S&P/ASX 200 lost 1.8 per cent to 4,316.20 and South Korea's Kospi shed 1.7 per cent to 1,955.53.

On Friday, U.S. stocks plunged after the government reported that hiring slowed sharply in April.

A report from the Labor Department Friday showing that U.S. jobs growth slumped in April for a second straight month. The 115,000 jobs added in April and the 154,000 in March were down form an average of 252,000 a month from December through February.

Energy stocks were among the hardest hit after the price of oil fell below $100 a barrel Friday, the first time since February.

Hong Kong-listed China National Offshore Oil Corp., or CNOOC, tumbled 4.5 per cent. Japanese energy explorer Inpex Corp. lost 4.9 per cent. South Korea's S-Oil Corp. fell 3.7 per cent.

Benchmark oil for June delivery was down $1.87 to $96.62 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $4.05 to settle at $98.49 in New York on Friday.

In currencies, the euro fell to $1.2985 from $1.3089 late Friday in New York.

The dollar fell to 79.83 from 79.87 yen.