Asia stocks sink amid global economic worries
Associated Press
BANGKOK — Asian stock markets sank Monday as Europe’s debt crisis threatened to intensify again while growth in China slowed.
Benchmark oil slid to nearly $102 per barrel. The dollar strengthened against the euro but fell against the yen.
Japan’s Nikkei slid 1.4 percent to 9,502.95, bruised by a higher yen. South Korea’s Kospi was down 0.9 percent at 1,990.84 after the Bank of Korea lowered its 2012 economic growth outlook to 3.5 percent, from a December estimate of 3.7 percent, Yonhap news agency reported.
Hong Kong’s Hang Seng fell 0.7 percent to 20,559.03 and Australia’s S&P/ASX 200 lost 0.4 percent to 4,304.40. Benchmarks in Singapore, Taiwan, Mumbai and Indonesia also fell.
The most recent worries in Europe are concentrated on Spain and Italy. The yield last week on Spain’s 10-year government bond rose to 5.93 percent, and Italy’s rose to 5.52 percent — signs of slipping investor confidence.
It means those countries will have to pay more to borrow money and force more cuts in government spending. That would hinder growth that is needed to extricate Europe’s smaller economies from a massive load of debt.
“Further pressure on Spanish bond spreads is likely especially as it has become clear that the country’s banks are relying more on European Central Bank funding,” analysts at Credit Agricole CIB in Hong Kong wrote in an e-mail.
Meanwhile, data on Friday showed the Chinese economy grew at an 8.1 percent pace in the January-March period, the slowest in almost three years. That compared with 8.9 percent growth in the fourth quarter.
Still, some analysts said the figure was in line with government expectations and that the world’s No. 2 economy shouldn’t be expected to post feverish growth numbers at a time when economies elsewhere are slowing.
“It may be slowing but that’s because the world in general is slowing. You can’t expect China’s growth to be 9 percent, 9.5 percent,” said Tom Kaan of Louis Capital Markets in Hong Kong. He said that measures to stimulate the U.S. economy seemed to be producing results.
“I still believe this is a good opportunity to buy. Fundaments have not changed for the USA,” he said. “Europe problems are returning, but not in a big way.”
Falling commodities prices sent shares of Hong Kong-listed Jiangxi Copper, China’s biggest copper producer, down 1.6 percent. Aluminum Corp. of China dropped 1.6 percent.
Shares of Sony Corp. rose 0.6 percent, a show of investor approval for the company’s plan to reduce its global work force by 6 percent and turnaround its money-losing TV business.
Sony, battered by competitors like Apple Inc. and Samsung Electronics Co., has struggled to regain the swagger and innovative flair that made it a dominant force in the 1980s and early 1990s.
On Wall Street on Friday, the Dow Jones industrial average lost 1.1 percent to close at 12,849.59. The Standard & Poor’s 500 index fell 1.3 percent to 1,370.26. The Nasdaq composite fell 1.5 percent to 3,011.33.
Benchmark oil for May delivery was down 75 cents to $102.08 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 81 cents to finish at $102.83 per barrel on the Nymex on Friday.
In currency trading, the euro fell to $1.3019 from $1.3081 on Friday in New York. The dollar fell to 80.80 yen from 81.10 yen.
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Tags: Debt crisis , Nikkei , World stocks
