Asia stocks fall on Europe debt, China hike fears
BANGKOK (AP) ? Asian markets crumpled Tuesday as Chinese shares slid on fears of an interest rate hike and the European Union's bailout of Ireland failed to convince investors the continent's debt crisis has been contained.
Oil prices dropped to near $85 a barrel as traders looked to U.S. supply reports for clues about the strength of demand for crude. In currencies, the dollar was down against the yen but up against the euro.
The Shanghai Composite Index tumbled 3.4 percent to 2,767.25 amid rumors China's central bank would soon raise interest rates to contain inflation. The Shenzhen index for China's second smaller exchange dived 4.4 percent.
Soaring prices in China, the world's No. 2 economy, are so far limited mostly to food, but analysts say price pressure could spread to other areas unless Beijing hikes interest rates and further tightens credit. Investors worry that might slow economic growth or reduce the amount of money flowing through the economy that is helping to finance stock trading.
"There is a little nervousness about how hard the policymakers will have to slam on the brakes to contain inflation," said David Cohen, an economist with Action Economics in Singapore.
Elsewhere in Asia, Japan's Nikkei 225 stock average dropped 1.7 percent to 9,954.74 and Hong Kong's Hang Seng fell 1.1 percent to 22,907.98. Australia's S&P/ASX200 index shed 0.7 percent to 4,587.10.
Benchmarks in India, Singapore, Indonesia, Thailand and the Philippines were also down while South Korea's Kospi index gained 0.3 percent to 1,901.64.
The Nikkei's slump came amid government figures that showed Japan's factories cut production for the fifth straight month in October, although the decrease wasn't as bad as expected. Unemployment worsened slightly and consumer spending fell in October, adding to Japan's struggle to keep its nascent economic recovery alive.
Investors also continued to worry that Sunday's euro 67.5 billion ($88.4 billion) bailout of Ireland by the European Union and the International Monetary Fund won't stop Europe's debt crisis from moving swiftly to another country.
"We still have concerns about the eurozone sovereign debt. It's one more threat to the global economy," Cohen said.
The rescue deal, approved by finance ministers at an emergency meeting in Brussels, means two of the eurozone's 16 nations have now come to depend on foreign help ? Greece and now Ireland. All the crisis talk is hitting stocks hard ? and underneath it all are fears that the contagion could spread to Spain, a major economy whose implosion would have serious repercussions for the euro.
Traders also remained cautious ahead of a slew of economic data due out of the U.S. this week including a closely watched employment report on Friday.
On Wall Street, the Dow Jones industrial average fell 39.51 points, or 0.4 percent, to close at 11,052.49 on Monday. The Standard & Poor's 500 index edged down 1.64, or 0.1 percent, to 1,187.76. The technology-heavy Nasdaq composite index dropped 9.34, or 0.4 percent, to 2,525.22.
Benchmark oil for January delivery was down 56 cents to $85.17 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.97 to settle at $85.73 on Monday.
In currencies, the dollar fell to 84.07 yen from 84.17 yen late Monday in New York. The euro fell to $1.3094 from $1.3110.
Copyright � 2010 The Associated Press. All rights reserved.
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.
No comments:
Post a Comment