Asia stocks down after Europe debt deal rally

HONG KONG—Asian shares fell Monday following last week’s Europe-inspired rally, with Tokyo losing earlier gains despite a government forex intervention when the yen hit a new record against the dollar.

While dealers were on a high last week after Thursday’s agreement to tackle the European debt crisis, the focus has now turned to finding out the details of the deal.

Tokyo fell 0.69 percent, or 62.08 points, to 8,988.39, Sydney closed 1.27 percent, or 55.2 points, off at 4,298.1 and Seoul fell 1.06 percent, or 20.45 points, lower at 1,909.03.

Hong Kong fell 0.77 percent, or 154.37 points, to end at 19,864.87 and Shanghai was 0.21 percent off, or 5.16 points, at 2,468.25.

The Japanese index had moved into positive territory in early afternoon after the government stepped into the currency markets to sell the yen, which hit another record high against the dollar.

The dollar rose to 78.10 yen in afternoon trade after sinking to a post-war low of 75.32 yen in the morning.

However, the effects of the intervention wore off equity markets, despite the dollar holding up.

It was the first intervention since August as the government tries to protect Japan’s exporters, who are hurt by the strong currency, which makes their goods more expensive overseas.

Finance Minister Jun Azumi on Thursday threatened government intervention in financial markets, complaining that speculators were using Europe’s debt crisis as an excuse to push the safe haven yen higher.

However, Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said: “The question, as in the past, is sustainability.”

“Previous interventions have had an impact for two or three days, but it has not led to a trend shift,” he told Dow Jones Newswires.

The euro was at $1.4012 from $1.3993, and at 109.08 yen from 109.31 yen.

Global markets have been on a high since Thursday’s eurozone deal, which will see Greece’s bondholders take a 50 percent cut on their assets, give a boost to the European Financial Stability Facility (EFSF) bailout fund, and a recapitalization of the region’s banks.

However, markets now want to know how the deal will work.

“With more questions than answers markets will be hungry for further details over coming weeks and until then it is difficult to see risk appetite stretching too far,” Mitul Kotecha, strategist at Credit Agricole, said in a note.

In Sydney, shares in Qantas closed 4.4 percent higher following an industrial tribunal’s order to an end to a bitter labor row that led to the grounding of the Australian airline’s entire fleet.

The carrier’s chief executive, Alan Joyce, on Saturday grounded its entire fleet around the world and ordered an unpaid lock-out of union staff after months of industrial action that has battered its share price.

But dealers welcomed a decision by industrial regulator Fair Work Australia to order the termination of the action by both sides, allowing them 21 days to hammer out their differences or face a compulsory arbitration decision.

Qantas resumed passenger flights Monday.

Eyes will this week be on central bank policy meetings in the United States, Europe and Australia this week, while US jobs data Friday will provide an indication as to the state of the world’s biggest economy.

They are also keenly awaiting the G20 summit lined up for the weekend for any trading cues.

European stock markets fell at the start of trading Monday, with London’s benchmark FTSE 100 index down 0.89 percent to 5,651.49 points.

Frankfurt’s DAX 30 slipped 0.99 percent to 6,283.19 points and in Paris the CAC 40 dropped 1.37 percent to 3,302.78.

On oil markets New York’s main contract, light sweet crude for delivery in December, rose 22 cents to $92.64 per barrel.

Brent North Sea crude for December delivery rose 56 cents to $109.51.

At 1100 GMT gold was up at $1,718.65 an ounce against $1,714.01.

In other markets:

— Singapore fell 1.72 percent, or 49.95 points, to 2,855.77.

Wilmar International was up 1.30 percent to Sg$5.47 while Singapore Airlines fell 0.59 percent to Sg$11.72.

— Taipei ended 0.37 percent, or 28.37 points, lower at 7,587.69.

Leading smartphone maker HTC was 0.87 percent lower at Tw$686.0 while Taiwan Semiconductor Manufacturing Co added 0.68 percent to Tw$73.6.

— Jakarta ended 1.02 percent, or 39.11 points, down at 3,790.85.

— Wellington closed 0.21 percent, or 6.96 points, higher at 3,332.58.

Fletcher Building fell 0.9 percent to NZ$6.65 but Telecom rose 0.2 percent to NZ$2.54.

— Indian shares slid 0.56 percent, or 99.79 points, to 17,705.01.

Sterite Industries, the local arm of global resources firm Vedanta fell 4.10 percent to 127.45 rupees while Hindalco, India’s largest private aluminium producer, fell 4.11 percent to 136.35 rupees.

— Kuala Lumpur closed 0.68 percent, or 10.07 points, up at 1,491.89.

CIMB Group Holdings rose 1.47 percent to 7.57 ringgit, while budget carrier AirAsia climbed 0.26 percent to 3.90 ringgit. Telekom Malaysia fell 0.24 percent to 4.24 ringgit.

— Bangkok edged up 0.16 percent, or 1.57 points, to 974.75.

Banpu added 2 baht to 628, while PTT lost 6 baht to 306.

— Manila was closed for a public holiday.