Asian shares slip on Europe nervousness
HONG KONG—Asian shares mostly dipped Tuesday as the previous day’s relief at political progress in Italy and Greece was replaced by caution over whether Europe’s leaders can tame the eurozone debt crisis.
As new governments in Rome and Athens prepared to push through key debt-busting legislation, German Chancellor Angela Merkel warned that the region was facing its “hardest hour” since World War II.
Tokyo slipped 0.72 percent, or 61.77 points, to 8,541.93, Sydney closed down 0.44 percent, or 19 points, at 4,285.6, while Seoul lost 0.88 percent, or 16.69 points, at 1,886.12.
Hong Kong shed 0.82 percent, or 159.74 points, to 19,348.44 while Shanghai was flat, nudging up 1.05 points to 2,529.76.
Markets rallied on Monday after Italian prime ministerial nominee Mario Monti replaced Silvio Berlusconi. Greece also has a new leader, Lucas Papademos, former deputy chief of the European Central Bank
However, Asian markets fell Tuesday following a sell-off in Europe and the United States as dealers began to consider that despite a change in leadership, Italy and Greece still faced a tough task to implement effective debt measures.
“Whilst the new governments led by reform-minded economists are seen as a good starting point for the reform process, implementation will at best take time,” said Ric Spooner, chief market analyst at CMC Markets, in Sydney.
“Markets are faced with a medium-term outlook full of risk that economic reforms will not survive the political process,” he told Dow Jones Newswires.
On Wall Street, the Dow Jones Industrial Average, which had risen in the previous two sessions, shed 0.62 percent, while the S&P 500 dropped 0.95 percent and the tech-heavy Nasdaq slid 0.80 percent.
Europe’s main stock markets dipped at the start of trading on Tuesday, with London’s FTSE 100 index down 0.31 percent, Frankfurt’s DAX 30 shed 1.08 percent while in Paris the CAC 40 lost 2.0 percent.
Highlighting the market’s continued nervousness in Rome, the 10-year cost of borrowing for Italy rose back above the acute danger level of 7.0 percent.
On Monday, Merkel told her party congress: “Europe is today… perhaps in its hardest hour since the Second World War.”
But she added that just as Germany had vowed to emerge stronger from the 2008 financial crisis, “now we must see to it that Europe comes out of today’s crisis stronger.”
She added: “It’s time for a breakthrough to a new Europe.”
The euro suffered a sell-off late Monday in New York and extended the losses in Asia.
The common currency fetched $1.3541 and 104.28 against $1.3629 and 105.07 in New York late Monday.
The dollar was at 76.99 yen compared to 77.09 yen.
On oil markets, New York’s main contract, light sweet crude for December delivery, rose 12 cents to $97.94 a barrel and Brent North Sea crude, also for December delivery, lost 62 cents to $111.62.
Gold was trading at $1,762.85 an ounce by 1100 GMT, compared with $1,781.15 late on Monday.
In other markets:
— Taipei fell 0.46 percent, or 34.59 points, to 7,491.06.
Hon Hai was 1.55 percent lower at Tw$82.5 while Taiwan Semiconductor Manufacturing Co. was 0.13 percent higher at Tw$76.0.
— Manila ended 0.16 percent, or 6.86 points, up at 4,363.73.
Metro Pacific Investment rose 0.9 percent to 3.34 pesos and property developer Megaworld climbed 6.2 percent to 2.07 pesos while Philippine Long Distance Telephone slid 0.1 percent to 2,438 pesos.
— Singapore closed down 0.66 percent, or 18.56 points, to 2,811.58.
Wilmar International shed 1.52 percent to Sg$5.19 and United Overseas Bank fell 0.68 percent to Sg$16.19.
— Indian shares closed down 1.38 percent, or 236.07 points, at 16,882.67.
Pharmaceuticals firm Cipla rose 6.51 percent to 18.75 rupees and real estate major DLF lost 6.6 percent to 208.25 rupees.
— Kuala Lumpur shares slipped 0.11 percent, or 1.65 points, to 1,477.22.
Communications group Axiata slipped 0.2 percent to 4.89 ringgit while plantations giant IOI Corp. dropped 1.2 percent to 5.11 as gaming giant Genting climbed 0.9 percent to 10.80 ringgit.
— Bangkok edged up 0.07 percent, or 0.69 points, to 984.97.
Banpu lost 2 baht to 580, while PTT shed 1 baht to 303.
— Wellington closed 0.2 percent, or 7.5 points, higher at 3,317.33.
Gaming group Sky City rose 1.5 percent to NZ$3.49, while Telecom Corp. gained 0.4 percent to NZ$2.62 and Air New Zealand slipped 0.5 percent to NZ$1.04.
