Asian markets fall on eurozone debt pact worries

HONG KONG—Asian markets mostly fell Tuesday, tracking losses on Wall Street as worries rose that a deal by European Union leaders to contain the region’s debt crisis would not be enough to solve its fiscal woes.

The concern, which weighed on the euro, was amplified by warnings from credit rating agencies, with Moody’s Investors Service saying that the debt crunch was in a “critical and volatile stage.”

Tokyo closed down 1.17 percent, or 101.01 points, at 8,552.81. Exporters with major business in Europe fell, with Nikon down 2.19 percent at 1,691 yen and Canon down 1.00 percent at 3,465.

Sydney finished 1.40 percent down, or 59.4 points, at 4,193.40, while Seoul lost 1.88 percent, or 35.70 points, to 1,864.06.

Hong Kong ended 0.69 percent lower, or 128.49 points, at 18,447.17. Banks led the falls, with Bank of China down 1.06 percent to HK$2.80, Industrial and Commercial Bank of China down 0.85 percent at HK$4.67 and China Construction Bank down 0.54 percent to HK$5.50.

Shares in China Gas, however, soared 20.36 percent to HK$3.37, after news that it received a takeover offer from Sinopec and piped-gas distributor ENN Energy Holdings.

“Quite simply, the EU summit was a sink-or-swim moment, and judging by the ensuing price action across global risk assets, it’s not the all-encompassing solution the market was anticipating,” Chris Gore, currency analyst at GoMarkets in Melbourne, told Dow Jones Newswires.

Shanghai was down 1.87 percent, or 42.96 points, at 2,248.59.

On Friday, 26 of the European Union’s 27 members backed tighter budget policing to help address the crisis threatening to crack apart the eurozone monetary union and send the global economy into another deep recession.

However, Germany’s hopes for a treaty revision were dashed when Britain’s Prime Minister David Cameron opted out of the plan by using his veto, saying he could not get the protection he wanted for the City of London financial center.

Some leaders hope the pact will convince the European Central Bank to drop its reluctance to use its full arsenal against the crisis after ECB president Mario Draghi called for a “new fiscal compact” last week.

Leaders also planned to pump 200 billion euros ($267 billion) into International Monetary Fund coffers to help the eurozone, which is struggling to boost its own rescue fund to one trillion euros.

In Tokyo, Japan’s finance minister Jun Azumi on Tuesday called the tighter fiscal discipline pact a “big step forward,” but added there remained a lack of clarity around tackling the crisis and what role would be played by the IMF.

Ratings agency Standard & Poor’s is expected to pass judgment on the agreement this week after putting 15 of 17 euro-member states – including France and Germany – on downgrade warning.

The agency last week announced the AAA status of the EU itself was on credit watch. Fitch Ratings predicted a “significant” economic downturn in Europe with the debt crisis likely to continue through 2012, while Moody’s said the crisis remains in a “critical and volatile stage.”

On Wall Street, the Dow Jones Industrial Average closed 1.34 percent lower Monday, while the broader S&P 500 lost 1.49 percent and the Nasdaq Composite shed 1.31 percent.

Intel shares sank 4.0 percent after it lowered its fourth-quarter earnings outlook, blaming the months of flooding in Thailand that shut down some of the world’s largest plants making computer disk drives.

European shares slipped in Tuesday morning trade with Frankfurt’s DAX 30 dipping 0.13 percent, the Paris CAC 40 off 0.39 percent and London’s FTSE 100 index flat.

On Asian currency markets, the euro fetched $1.3190 and 102.69 yen in Tokyo afternoon trade, compared with $1.3188 and 102.72 yen in New York late Monday. The dollar was flat against the Japanese currency at 77.84 yen.

New York’s main oil contract, light sweet crude for delivery in January, was up 38 cents to $98.15 a barrel.

Brent North Sea crude for January delivery was up 59 cents to $107.85.

Gold was trading at $1,664.80 an ounce at 1055 GMT, against $1,680.94 an ounce late Monday.

In other markets:

— Jakarta fell 28.57 points, or 0.8 percent, to 3,763.57.

Bank Rakyat dropped 2.2 percent to 6,550 rupiah, Bank Mandiri lost 1.5 percent to 6,500 rupiah and coal producer Bumi slid 3.4 percent to 2,150 rupiah.

— Kuala Lumpur fell 0.12 percent, or 1.71 points, to 1,465.39.

Telekom Malaysia gained 0.7 percent to 4.58 ringgit, Malayan Banking added 0.4 percent to 8.19 while Tenaga Nasional lost 0.6 percent to 5.47 ringgit.

— Singapore closed down 0.59 percent, or 15.98 points, at 2,685.74.

Fraser and Neave added 2.18 percent to Sg$6.10 and United Overseas Bank gained 1.23 percent to Sg$15.69.

— Taiwan’s weighted index fell 0.76 percent, or 52.73 points, to 6,896.31.

HTC rose 2.65 percent to Tw$426.0, while Hon Hai lost 0.49 percent to Tw$81.5.

— Manila closed 0.15 percent, or 6.28 points, higher at 4,282.62.

First Gen Corp. rose 3.15 percent to 14.42 pesos with BDO Unibank adding 0.26 percent to 58.95 pesos.

— Bangkok edged down 0.33 percent or 3.39 points to 1,030.61.

Banpu lost 2.07 percent to 568.00, while Siam Cement shed 1.21 percent to 326.00.

— Mumbai ended up 0.83 percent, or 132.16 points, at 16,002.51.