Asian stocks fall as Bernanke warns on economy

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Asian stocks fall as Bernanke warns on economy

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In currency markets, the dollar fell 0.1% to 79.03 yen and the euro fell 0.1 percent to $1.22.

18 July,2012 10:36 am

Most Asian stock markets dropped Wednesday despite upbeat U.S. corporate earnings as the Federal Reserve chief warned another recession is possible without giving a hint at plans for stimulus.Hong Kongs Hang Seng was down 0.7 percent at 19,318.08 and South Koreas Kospi dropped 0.6 percent to 7,087.08. Australias S&P/ASX 200 lost 0.3 percent to 4,127.70 while Japans Nikkei 225 added 0.3 percent to 8,785.26. Chinas Shanghai Composite Index was little changed 2,161.77.Asian stocks widened losses in the early trading when North Korea said it would issue an important announcement. The advance notice echoed the similar warning the reclusive state dispatched seven months ago before announcing former leader Kim Jong Ils death. Markets did not budge when the Norths state media said Kims son and the countrys new leader Kim Jong Un was named the top commander of its army.Investor sentiment was dampened as Federal Reserve Chairman Ben Bernanke gave a bleak assessment of the U.S. economy in his testimony to the Senate. Without a congressional agreement, tax increases and deep spending cuts would take effect in the U.S. at years end. Bernanke noted Tuesday what the Congressional Budget Office has warned: Arecession would occur, and 1.25 million fewer jobs would be created in 2013.The fed chief gave no signal on what steps that the Fed might take to support the economy and whether any action was imminent, disappointing investors who expected a more aggressive stance.Intels gloomy assessment of the global economic outlook after U.S. markets closed also dented sentiment. The worlds largest chipmaker said its revenue for the current quarter is likely to come in below market forecasts.Overnight gains in the U.S. markets failed to cheer investors in Asia. On Tuesday, stronger-than-expected earnings reports from big U.S. companies lifted Wall Street. Shares of the U.S. biggest toy maker Mattel and Coca-Cola climbed after reporting earnings that beat expectations.The Dow Jones Industrial Average rose 0.6 percent and the Nasdaq gained 0.5 percent. The Standard & Poors 500 added 0.7 percent.Investors are waiting for earnings releases and Bernankes return to Capitol Hill on Wednesday to testify to the House Financial Services Committee.Benchmark crude for August delivery was down 45 cents at $88.87 in electronic trading on the New York MercantileExchange. The contract added 79 cents to end Tuesday at $89.22 per barrel in New York.In currency markets, the dollar fell 0.1 percent to 79.03 yen and the euro fell 0.1 percent to $1.228.