Asian stocks waver as Europe crisis fears weigh

Business

Asian stocks waver as Europe crisis fears weigh

Close

Asian stocks wavered looking for direction after a credit ratings agency warning the US banks.

17 November,2011 04:35 am

Asian stocks wavered on Thursday, looking for direction after a credit ratings agency warning that US banks could be hit hard if Europes debt crisis spreads beyond financially troubled countries like Greece.Hong Kongs Hang Seng dropped 0.9 percent to 18,793.28 while South Koreas Kospi climbed 0.6 percent to 1,867.56. Japans Nikkei 225 index was up 0.1 percent at 8,475 while mainland Chinas benchmark Shanghai Composite Index was flat at 2,467.67.Benchmarks in Singapore, Indonesia, New Zealand and India fell. Australias S&P ASX 200 edged up 0.3 percent to 4,258.20.Europes sovereign debt crisis is the big overhang on the market at the moment, said Andrew Sullivan, principal sales trader at Piper Jaffray Asia Securities Ltd. in Hong Kong.Until (investors) see Greece default and then everyone stares at the fallout and realizes that the world isnt ending, or the eurozone comes up with a solid plan that is financed properly until one of those two options come out were not really going to see that overhang move away.Asian markets were held back as fears in Europe heightened following a rise in the interest rate or yield on 10-year Italian government bonds to near 7 percent. Thats the level that eventually forced Greece, Ireland and Portugal to seek bailouts. It was a particular concern because Italy is considered to big to bail out.That was followed by a warning from Fitch Ratings, one of the big three credit rating agencies, that U.S. banks could be greatly affected if Europes debt crisis spreads beyond the affected countries. The developments on Wednesday drove up fears about the global financial economy.Contagion from the eurozone debt crisis is spreading quickly, threatening to turn a regional crisis into a global crisis, strategists at Credit Agricole CIB said in a research note.Asian investors were also fretting about the financial health of property developers sparked by concerns about sliding prices in Chinas once-buoyant real estate market, Sullivan said. Shares of South Koreas Hynix Semiconductor Inc. rose 2.9 percent after a California jury determined it didnt conspire with a rival chip-maker to fix prices to keep Rambus Inc. out of the market.Scandal-hit Japanese camera and medical equipment maker Olympus Corp. rose 3.2 percent even after its top shareholder, Nippon Life Insurance, said it was cutting its stake to 5 percent from 8 percent. The stock has lost four-fifths of its value since a scandal erupted over the concealment of huge losses.In New York on Wednesday, the Dow Jones industrial average closed at 11,905.59, a loss of 1.6 percent, with most of the losses coming after the Fitch report was released.The Standard & Poors 500 index fell 1.7 percent to 1,236.92. The Nasdaq composite lost 1.7 percent to 2,639.61. Benchmark crude for December delivery was down 48 cents at $102.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $3.22 to settle at $102.59 in New York on Wednesday.In currencies, the euro weakened to $1.3491 from $1.3512 late Wednesday in New York. The dollar strengthened to 77.02 yen from 76.94 yen.