Asian shares slip as China tumbles on rate hike report

Wednesday, 8 December 2010 00:35 -     - {{hitsCtrl.values.hits}}

HONG KONG (AFP) - Asian markets slipped on Tuesday as traders were given an anaemic lead from Wall Street while Chinese stocks tumbled on reports that Beijing will hike interest rates again soon.

The euro gave up some of its recent gains against the yen and dollar as European finance ministers said they would not be providing further cash to help debt-burdened countries.

Shanghai fell 1.24 percent after a report in the state-run China Securities Journal Tuesday that said the central bank may raise interest rates around this weekend, ahead of the release of inflation data on Monday.

A hike would be the second in two months by China as it tries to combat rising inflation and comes after the politburo said Friday it would shift its monetary policy stance from “relatively loose” to “prudent”.

However, Hideaki Inoue, senior dealer at Mitsubishi UFJ Trust and Banking, told Dow Jones Newswires: “This is moving the market in the absence of other major news, but to a large extent I think any such hike has already been priced in.”Tokyo was 0.65 percent off by the break as exporters were hurt by a stronger yen amid concerns over the eurozone debt, while Hong Kong was 0.31 percent off in the first few minutes and Singapore edged 0.33 percent down.

However, Sydney gained 0.37 percent, Seoul rose 0.22 percent

The European debt woes returned as Eurogroup head Jean-Claude Juncker said Monday after a Brussels meeting that finance chiefs saw no need for “immediate action” to hike a trillion-dollar EU-IMF fund for countries in trouble.

His comments come amid mounting fears that the debt crisis that last month claimed Ireland as its latest victim now threatens to spread amid fears for Portugal and Spain.