In your example the stack is incremented* by 12 (10 plus 2 for the int) to make room for those variables. They are thus uninitialized because they have whatever was on the stack. When loop exits that stack space is reclaimed.
If you make them global the stack doesn't get altered but you have 12 bytes less available for the stack because they have to go somewhere.
The stack and heap share the same piece of memory (RAM) starting at wherever your global variables end. The heap grows upwards and the stack grows downwards from the top of memory. If they happen to collide: trouble!
* decremented really, because the stack grows downwards.