Thursday, February 9, 2012

why Asian stock markets Nikkei down feb 10 2012

why Asian stock markets Nikkei down feb 10 2012 : Asian stock markets dropped Friday after Europe's finance ministers demanded more spending cuts from Greece before clearing a euro130 billion ($170 billion) bailout to stave off the country's bankruptcy. Benchmark oil hovered below $99 per barrel while the dollar rose against the euro but fell against the yen.

Japan's Nikkei 225 index fell 0.3 percent to 8,978.33. Hong Kong's Hang Seng lost 0.6 percent to 20,888.68 and South Korea's Kospi dropped 0.9 percent to 1,996.71. Australia's S&P/ASX 200 shed 0.8 percent to 4,250.70.

Greece announced an agreement with European debt inspectors Thursday to cut costs and keep from defaulting on its debt next month, an event that would send shock waves through the world financial system.

But finance ministers from nations that use the euro said Athens didn't go far enough and have given Greece just a few more days to find an extra euro325 million ($430 million) of spending cuts and get parliament to approve the measures.

All that suggests "further uncertainty on the horizon," Credit Agricole CIB in Hong Kong wrote in an email. "A Greek parliamentary vote set to begin this weekend may see some progress but markets will trade cautiously ahead of the vote."

The austerity package that failed to satisfy European finance ministers already calls for Greece to make steep new cuts in government jobs and spending. The country's international lenders insisted on the cuts as a condition for a euro130 billion emergency bailout that Greece urgently needs to make a bond payment next month.

The cuts will be hard to implement in a country that has grown used to profligate government spending. Protesters have taken to the streets of Athens regularly to denounce the government and its austerity measures.

Second-tier stocks in Hong Kong, particularly appliance makers, were benefiting from the rotation out of blue chips that often occurs once the market reaches a temporary high, Wong said. Haier Electronics Group Co. soared 7.9 percent and Skyworth Digital Holdings rose 4.9 percent. GOME Electrical Appliances was 1.8 percent up.

But financial shares sagged amid the uncertainty surrounding Greece. Mitsubishi UFJ Financial Group lost 2 percent. Australia & New Zealand Banking Group fell 1 percent. South Korea's Shinhan Financial Group Co. lost 3.2 percent.

Australian mining giant Rio Tinto dropped 2.3 percent, a day after reporting a 59 per cent slump in full year profit due to a writedown of its aluminum business. Rival BHP Billiton, which reported weaker-than-expected profits earlier this week, fell 2.4 percent. Energy Resources of Australia tumbled 3 percent.

Hong Kong-listed Lenovo Group Ltd., the world's second biggest personal computer maker, jumped 4.2 percent a day after reporting that quarterly profit grew by more than half.

In currencies, the euro fell to $1.3266 from $1.3290 late Thursday in New York. The dollar fell to 77.61 yen from 77.66 yen.
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