Asian shares lower as Europe fears weigh
HONG KONG—Asian shares fell Wednesday as markets weighed positive US economic data against ongoing concerns about Europe’s debt crisis and the region’s anemic growth.
New leaders in debt-ridden Italy and Greece have offered investors some hope that they can solve their fiscal woes, avoiding the spread of a debt crisis that has threatened to drag the world economy into recession.
However, the euro lost ground against the dollar and borrowing costs in Italy, Spain and even France rose amid concerns about the eurozone’s debt financing, while figures released Tuesday showed the 17-nation bloc saw just 0.2 percent growth in the third quarter.
Tokyo closed off 0.92 percent, or 78.77 points, at 8,463.16, Sydney fell 0.89 percent, or 38.2 points, to 4,247.4 and Seoul was 1.59 percent lower, shedding 30.05 points, to close at 1,856.07.
Hong Kong’s benchmark Hang Seng index ended down 2.00 percent, or 387.54 points, at 18,960.90 and Shanghai ended 2.48 percent, or 62.80 points, lower at 2,466.96.
“The bigger worry for markets is the situation in the eurozone, which appears to be deteriorating by the day,” Credit Agricole said in a note to clients.
Article continues after this advertisement“Contagion has spread across eurozone bond markets like wildfire and the lack of action to create a firewall means that there is little to extinguish it.”
Article continues after this advertisementThe interest rate that Italy must pay on its 10-year bonds jumped back above the 7.0 percent level seen as unsustainable for the country to service its debt while Spanish 10-year government bonds rose to 6.341 percent.
Even France was punished, with its 10-year bonds at 3.683 percent, more than twice as much as regional economic powerhouse Germany must pay to borrow.
Italian prime minister designate Mario Monti vowed to unveil a new government that can overcome Rome’s debt crisis, with the premier-in-waiting set to be officially sworn in later Wednesday.
In Athens, the newly installed premier Lucas Papademos was racing to adopt deeply unpopular reforms demanded by Greece’s international creditors before the release of bailout loans crucial to avoiding bankruptcy.
Papademos’ government is expected to be confirmed in a vote of confidence on Wednesday but must hold early elections in a few months.
Despite the caution over Europe, investors were buoyed by US figures released Tuesday that showed retail sales continued to rise in October, helped by a jump in electronics and appliances.
A key manufacturing index for New York also surged to its first positive reading in six months in November, suggesting an upturn in business conditions.
The data helped US markets stay in positive territory on Tuesday, with the Dow Jones Industrial Average closing 0.14 percent higher, the broad-based S&P 500 rising 0.48 percent and the Nasdaq Composite up 1.09 percent.
On Wednesday, Beijing said foreign direct investment in China eased in October as Western trade partners struggled to resolve their economic woes.
Investment reached $8.33 billion in October, still up 8.75 percent year on year, but lower than the $9.05 billion invested in September.
For the first 10 months of the year, China took a total of $95.01 billion in foreign direct investment, up 15.86 percent from the same period last year.
On currency markets, the euro lost further ground against the dollar, with the common unit falling to $1.3524 and 104.02 yen from $1.3536 and 104.31 yen in New York late Tuesday.
The dollar was at 76.90 yen compared with 77.05 yen.
New York’s main oil contract, light sweet crude for delivery in December, fell 76 cents to $98.61 per barrel in the afternoon.
Brent North Sea crude for January delivery shed 68 cents to $111.50.
Gold was trading at $1,773.15 an ounce by 1030 GMT, compared with $1,779.95 late Tuesday.
In other markets:
— Singapore closed down 0.15 percent, or 4.14 points, at 2,807.44.
Oversea-Chinese Banking Corp. gained 0.60 percent to 8.41 while Singapore Telecommunications shed 1.56 percent to 3.16.
— Taipei slipped 1.38 percent, or 103.54 points, to 7,389.87.
Taiwan Cement fell 3.59 percent to Tw$34.95 while leading smartphone maker HTC was 1.01 percent lower at Tw$683.0.
— Manila ended down 0.51 percent, or 22.11 points, at 4,341.62.
Metropolitan Bank & Trust shed 2.6 percent to 70 pesos and SM Investments fell 0.7 percent to 554.50 pesos. But San Miguel surged 4.4 percent to 124.80 pesos and port operator ICTSI was up 4.9 percent at 56.95 pesos.
— Wellington closed down 1.08 percent, or 35.91 points, at 3,281.42.
Fletcher Building fell 3.9 percent to NZ$6.15 and Telecom Corp. was down 3.0 percent at NZ$2.55. Air New Zealand was unchanged on NZ$1.04.
— Kuala Lumpur ended flat, dipping 0.38 points to 1,476.84.
Financial firm CIMB Group Holdings shed 0.56 percent to 7.06 ringgit and Petronas Chemicals Group fell 2.97 percent to 6.21 ringgit but UEM Land Holdings Bhd gained 0.90 percent to 2.25 ringgit.
— Jakarta was almost unchanged, nudging 0.25 points higher.
— Bangkok rose 1.23 percent, or 12.14 points, to close at 997.11.
— Mumbai closed 0.63 percent, or 106.80 points, lower at 16,775.87.
Hindustan Petroleum Corp. Ltd. (HPCL) fell 4.84 percent to 287.1 rupees and Indian Oil slid 2.47 percent to 268.75.
Troubled Kingfisher Airlines, which has seen speculation over its financial viability after cancelling routes and axing its low-cost service, jumped 14.42 percent to 25.00 rupees, on bargain-hunting.
