Asian markets mostly down as eurozone fears weigh

HONG KONG—Asian markets were mostly lower on Tuesday as optimism over reports that China was in talks to buy huge amounts of Italian bonds was outweighed by ongoing concerns about the wider eurozone debt crisis.

The euro clawed back some of the heavy losses it suffered on Monday, when it hit a 10-year low versus the yen, but it remained under pressure as traders stayed risk-averse because of a lack of indicators to push it upwards.

Tokyo rose 0.95 percent, or 80.88 points, to 8,616.55 and Sydney was 0.85 percent, or 34.2 points, higher at 4,072.7.

Shanghai, which was closed Monday, ended 1.06 percent, or 26.45 points, lower at 2,471.30 as it played catch-up with the previous session’s huge regional losses, while dealers are jittery about the state of China’s economy.

Taipei, which was also closed Monday for a holiday, tumbled 2.88 percent, or 219.20 points, to end at 7,391.37.

Hong Kong and Seoul were closed for the mid-autumn public holidays.

Investors are likely to buy back shares following Monday’s sell-off in the absence of additional headlines showing further deterioration of the Greek debt crisis, said Kenichi Hirano, operating officer at Tachibana Securities.

But Greece-related concerns remain, Hirano told Dow Jones Newswires. “Nothing has fundamentally changed,” he said.

Dealers took some solace from a report in the Financial Times that Beijing could buy bonds from Italy, which is considered one of the eurozone economies that are in danger of needing a bailout – following Greece, Portugal and Ireland.

The news that China was “in discussions to purchase Italian debt has calmed the market; remember that China eased European tensions in the past by purchasing Spain’s debt back in January,” noted Emma Lawson at National Australia Bank.

The euro fetched $1.3621 early in Europe, from $1.3680 in New York late Monday but well up from the levels near $1.3500 the previous session.

The common European currency was at 104.80 yen against 105.56 in New York after falling below 104.00 on Monday to a 10-year low.

The dollar Tuesday edged down to 76.98 yen from 77.15.

The Dow saw a late rally to end up 0.63 percent on the China-Italy report, while the S&P 500 climbed 0.70 percent and the Nasdaq Composite rallied 1.10 percent.

The US gains came despite a big sell-off in Asia and Europe on Monday caused by renewed fears that Greece – which was recently given the green light for a second bailout – could default on its debt repayments.

Germany’s Economy Minister Philipp Roesler said Monday that Europe could no longer rule out an “orderly default” for Greece, while Der Spiegel said Berlin officials were considering a possible scenario of Athens returning to the drachma if it defaults. However, the officials denied this.

New York’s main oil contract, light sweet crude for delivery in October, was up 81 cents to $89 per barrel in afternoon trade.

Brent North Sea crude for October delivery gained 61 cents to $112.86.

Gold was trading at $1,818.60 an ounce at 0800 GMT on Tuesday, down from $1,841.20 in late trade Monday.

In other markets:

— Singapore fell 0.52 percent, 14.21 points, to close at 2,729.37.

Singapore Telecom (SingTel) was flat at Sg$3.04 and DBS Bank eased 1.22 percent to Sg$12.20.

— Manila closed flat, edging up 3.14 points to 4,292.91.

Philex Mining slumped 4.2 percent to 25.95 pesos but subsidiary Philex Petroleum surged 15.8 percent to 9.96 pesos. SM Investments was up 0.4 percent at 552 pesos.

— Wellington added 0.66 percent, or 21.60 points, to 3,285.41.

Fletcher Building rose 0.8 percent to NZ$7.71, Sky City was 1.5 percent higher at NZ$3.45 and Telecom gained 2.0 percent to NZ$2.52.

— Jakarta fell 0.55 percent, or 21.33 points, to 3,874.78.

Car distributor Astra International fell 0.6 percent to 69,000 rupiah, nickel miner Inco slid 1.3 percent to 3,750 rupiah and Telkom lost 0.7 percent to 7,350 rupiah.

— Kuala Lumpur was 0.12 percent, or 1.74 points, higher at 1,448.00.

Telecoms company Axiata Group moved up 0.6 percent to 4.81 ringgit and plantation firm Sime Darby gained 0.2 percent to 8.70. Gaming giant Genting Malaysia lost 0.3 percent to 3.39 ringgit.

— Bangkok closed down 0.88 percent, or 9.16 points, at 1,031.67.

— Indian shares edged down 0.21 percent, or 34.3 points, to 16,467.44 – a third straight day of losses.

India’s largest commercial bank, State Bank of India, fell 1.56 percent, or 29.1 rupees, to 1,840.5.