Asian markets lower on Europe fears

HONG KONG—Asian shares fell Monday as markets awaited details of plans to fix Europe’s debt crisis and the outcome of key Sino-US trade talks, with simmering tensions between the economic superpowers.

Tokyo gave up 0.32 percent, or 26.64 points, to close at 8,348.27 while Sydney ended 0.34 percent, or 14 points, lower at 4,163.0 and Seoul was down 1.04 percent, or 19.14 points, at 1,820.03.

Hong Kong was off 1.44 percent, or 265.38 points, to end at 18,225.85 and Shanghai closed flat, edging 1.43 points lower to 2,415.13.

Markets also reacted to news that Japan logged an unexpected trade deficit in October, while business hub Singapore predicted sharply lower economic growth next year and warned a weaker global economy could worsen the situation.

“It’s a brand-new week but the same old concerns hover over financial markets,” said Tim Waterer, senior foreign exchange dealer at CMC Markets in Sydney.

“Debt debacles on both sides of the Atlantic continue to halt any potential uprising of brighter sentiment from traders.”

The European Commission will publish legislative proposals for common eurozone bonds on Wednesday in the latest bid to contain the debt crisis, which has threatened to plunge the world economy into recession.

New rules would see troubled eurozone states effectively club together to guarantee each other’s debts and police national budgets to keep the region’s fiscal woes in check.

The proposals have been designed to combat nearly two years of regional turmoil after bailouts for Greece, Ireland and Portugal, and with even France now facing mounting pressure going into a presidential election year.

Governments have been deposed by economic turmoil in several nations, with Spain’s conservative Popular Party sweeping to victory Sunday in a general election with rising concerns about the country’s ability to finance its debts.

International Monetary Fund chief Christine Lagarde warned Sunday that Europe’s economic problems, if not addressed, could spread, leading to “major” consequences for the United States, a key trade and business partner which is already fighting to pull itself out of the economic doldrums.

Investors also awaited details of China-US trade talks which started Sunday, with Beijing’s currency policy – and claims it undervalues the yuan – and market access restrictions expected to top the agenda.

The two countries signed agreements covering areas that include energy cooperation and the trade of high-technology products, but offered no details, Dow Jones Newswires reported.

Wall Street was mixed on Friday with the Dow Jones Industrial Average closing 0.25 percent higher while the broad-based S&P 500 edged down 0.02 percent and the tech-heavy Nasdaq Composite lost 0.60 percent.

Japan on Monday posted a 273.8 billion yen ($3.6 billion) trade deficit in October, reversing a year-earlier surplus of 812.6 billion yen and confounding economists’ expectations.

Markets were also watching deliberations on a US deficit-reduction plan ahead of Wednesday’s deadline.

In Sydney, Qantas fell 1.2 percent after announcing that it had been unable to reach a compromise deal over pay and conditions with pilots and ground crew unions, and would now go to arbitration.

The ongoing row triggered the shock grounding of the carrier’s global fleet last month.

On currency markets, the euro fetched $1.3445 and 103.31 yen, compared with $1.3519 and 104.00 yen in New York late Friday.

The dollar was at 76.85 yen, compared with 76.93 yen in New York and a post-war low of 75.32 yen at the end of last month.

New York’s main oil contract, light sweet crude for delivery in January, fell 27 cents to $97.40 a barrel in the afternoon.

Brent North Sea crude for January delivery gained 10 cents to $107.66.

Gold was trading at $1,702.10 an ounce by 1045 GMT, from $1,720.00 late Friday.

In other markets:

— Singapore closed down 1.19 percent, or 32.36 points, at 2,697.98.

Earlier in the day the government said it was now forecasting sharply lower economic growth of 1.0-3.0 percent in 2012, down from an estimated 5.0 percent this year amid an export slowdown.

Oversea-Chinese Banking Corp. fell 1.35 percent to Sg$8.04 and Sembcorp Industries shed 1.22 percent to Sg$4.04.

— Taipei dived 2.64 percent, or 191.14 points, to 7,042.64.

Leading smartphone maker HTC lost 3.48 percent at Tw$637.0 while Taiwan Semiconductor Manufacturing Co was 1.21 percent lower at Tw$73.3.

— Manila ended flat, dipping 2.96 points, to 4,299.47.

San Miguel rose 0.7 percent to 126.70 pesos and port operator ICTSI advanced 2.5 percent to 59.45 pesos while SM Investments fell 0.5 percent to 535.50 pesos and Philippine Long Distance Telephone slid 0.3 percent to 2,370 pesos.

— Wellington closed 0.17 percent, or 5.67 points, higher at 3,256.56.

Fisher & Paykel Healthcare rose 0.4 percent to NZ$2.41 and Telecom added 1.4 percent to NZ$2.49, while Air New Zealand slipped 0.5 percent to NZ$1.035.

— Kuala Lumpur fell 1.40 percent, or 20.32 points, to 1,434.08.

Infrastructure group Gamuda lost 3.9 percent to 2.99 ringgit, and gaming giant Genting slipped 3.6 percent to 10.22 ringgit. Telecoms company Maxis gained 0.4 percent to 5.31 ringgit.

— Jakarta fell 1.99 percent, or 74.67 points, to 3,679.83.

— Bangkok closed 1.94 percent, or 19.09 points, lower at 965.07.

— Mumbai ended 2.60 percent, or 425.41 points, lower at 15,946.10.