Asian shares mixed, Europe debt woes weigh

Wednesday, 25 May 2011 00:00 - - {{hitsCtrl.values.hits}}

HONG KONG, (AFP) - Asian stock markets were mixed Tuesday as bargain hunting after heavy losses in the previous session was tempered by concerns over China’s economy and ongoing eurozone debt woes.

The euro remained under pressure after Standard & Poor’s outlook downgrade of Italy’s debt while Greece was under pressure over a possible restructuring and a regional vote in Spain cast doubts on the government’s future.

Tokyo edged down 0.09 percent by the break, Sydney fell 0.33 percent and Hong Kong lost 0.24 percent while Shanghai gave up 0.32 percent.

Seoul gained 0.55 percent and Singapore was 0.18 percent up.

“Global shares are facing a downward adjustment on the back of deepening European debt concerns,” Hiroichi Nishi, general manager at SMBC Nikko Securities, told Dow Jones Newswires.

The Italian outlook downgrade at the weekend raised fears that the stronger peripheral states in the euro bloc could face the same fate as Greece, Portugal and Ireland in needing a bailout.

S&P’s downgrade from “stable” to “negative” came on concerns over the country’s weak growth prospects. The move came just after Fitch said it had cut Greece’s debt rating.

The possibility Greece might move to restructure its debt was causing real concern, dealers said, as it showed divisions between politicians who appear ready to accept the move and the European Central Bank, which is opposed to it.

Athens has meanwhile announced it would immediately begin selling off state assets in a bid to reduce its massive debt and this at least initially appeared to help steady the euro.

In Spain the Socialist government was handed a drubbing in local elections, raising worries over Madrid’s ability to deal effectively with its economy amid calls for national polls.

The euro dropped to $1.4017 in early Tokyo trade from 1.4047 late Monday in New York. The single currency fell below $1.40 on Monday in Europe.

The euro fell to 114.96 yen from 115.23 yen.

The dollar fetched 81.95 yen in Tokyo morning trade, unchanged from New York.

Hong Kong and Shanghai extended Monday’s poor performance after HSBC released preliminary manufacturing data suggesting China’s economy was slowing down.

In Tokyo Sony rose 1.85 percent despite saying after the market close Monday that it expected to post a $3.2 billion net loss for the fiscal year ended March.

On oil markets New York’s main contract, light sweet crude for July delivery, gained 30 cents to $98 a barrel, while Brent North Sea crude for July delivery rose 61 cents to $110.71.

Gold opened in Hong Kong at $1,517.00-$1,518.00 per ounce, up from Monday’s close of $1,509.00-$1,510.00.