Asian markets fall amid Greek rescue package confusion

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Asian markets fall amid Greek rescue package confusion

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Asia Stocks fell by most in six weeks on Greece rescue package confusion.

05 November,2011 02:01 pm

Asia stocks fell, with the regional benchmark index recording its biggest weekly retreat in six weeks, as political wrangling in Greece put a European rescue package in doubt and China’s manufacturing growth slowed.BHP Billiton Ltd. (BHP), the world’s largest mining company, was the biggest drag on the MSCI Asia Pacific Index as commodity prices dropped and staff at three of its mines threatened to strike. OneSteel Limited, a Sydney-based steel manufacturer, fell the most on the index this week dropping 24 percent on lower than expected earnings. Toyota Motor Corp. led exporters lower, dropping 3 percent on concern that renewed uncertainty about Europe’s debt crisis will damp global demand.The MSCI Asia Pacific Index declined 3.6 percent to 120.22 this week, its biggest weekly drop since the period ending Sept. 23. Stock prices fell after Greek Prime Minister George Papandreou announced on Oct. 31 a parliamentary confidence vote and his desire to hold a referendum on Europe’s rescue pact. He scrapped the plan Nov 3, the same day the European Central Bank unexpectedly cut interest rates, spurring a regional rally.“People were naturally skeptical that the resolution agreed last week in Europe was going to bring an end to the volatility in markets, and that’s clearly the case with what we’ve seen,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The deteriorating global economic growth indicators are an increasingly uncertain backdrop.”The Asian benchmark’s drop pared last week’s rally. The index had surged 7.5 percent on the news of the European aid plan for Greece. Stocks have retreated this year as Europe’s smoldering debt crisis, stuttering US growth and tighter monetary policy in China damped the outlook for earnings.