Asian markets tumbled and the euro hit a more than three-month low after voters in France and Greece ousted ruling parties in a backlash against austerity measures aimed at battling the euro-zone crisis.
In France, socialist Francois Hollande took control of Europe's second-largest economy with a pledge to renegotiate with Germany the bailout deal for other parts of the euro zone.
Greek voters cast doubt on whether the two main parties, New Democracy and Pasok, can form a coalition. The latest count suggested a bailout-supporting coalition may just scrape together a one-vote majority, according to Bloomberg.
Reports that Greek law-makers may seek to alter the terms of the country's multibillion-euro bailout or overturn it has caused consternation among investors.
Craigs Investment Partners broker Chris Timms predicted the euro zone credit crisis had been extended because of the election results.
"Everyone outside of Greece can see that austerity measures are the right thing to do but Greek voters have gone against that notion. The rest of the world is left shaking its head.
"They have made some progress in Europe but this [the elections] will set them back."
There was fresh doubt about the ability of the euro zone to tackle the debt crisis.
Sharemarkets were mainly in positive territory throughout April but now people would be left to work out the implications of the election results, Mr Timms said.
United States stocks fell sharply on Saturday, New Zealand time, sending the Standard & Poor's 500 and the Nasdaq to their worst week of the year after April job gains came in below forecasts. Investors were already worried about the possible election results, he said.
The Dow Jones Industrial Average closed down 1.3% and all 30 blue-chip stocks ended lower, led by more than 3% losses in Bank of America and Cisco Systems.
Mr Timms said the dollar was likely to fall further this week. It was trading at US79.19 at 5pm yesterday.
In contrast to the European gloom, China could provide a bright spot this week as it prepares to release a raft of data to provide fresh evidence that its economy bottomed in the first quarter and is starting a gradual turn upwards.
China posted its weakest growth in nearly three years in the first quarter, with gross domestic product expanding 8.1%. The slowdown in growth coincided with deteriorating economies in the euro zone and the US - China's two largest trading partners.
China is New Zealand's second-largest export market and economists here say they will be watching the trade balance data out on Thursday, followed by retail and production sales and the GDP data out on Friday.
US Federal Reserve chairman Ben Bernanke will speak at an annual conference on banking structure and competition on Thursday. Investors in the US will be looking to reports on wholesale trade, international trade, jobless claims, import and export prices, producer prices and consumer sentiment for clues about the state of the world's largest economy.
The New Zealand Government's accounts are due out at 10am today, and the Australian Government's Budget will be released at 9.30pm.
At a glance
• New Zealand dollar down US3c in a week.
• Fresh doubt about the euro zone's ability to tackle its debt crisis.
• Asia-Pacific sharemarkets lower on election results
• Global markets set to open down today
• A week of uncertainty likely
• Interest rate cut by Reserve Bank becomes more likely
