Uncertainty about the bailout prospect for Greece and Spain, which are the two major risks in what has become the euro zone's three-year-long debt crisis, also undermined investors' risk appetite.
The MSCI index of Asia-Pacific shares outside Japan inched down 0.1 percent. Australian shares were down 0.2 percent, and South Korean shares fell 0.3 percent. Tokyo's Nikkei average opened down 0.4 percent, hitting a fresh one-week low.
Asian shares eased on Tuesday after sentiment was weakened by data showing Germany's business confidence dropped in September, and a weak earnings forecast from Caterpillar Inc, both of which underscored worries about a global growth slowdown.
Uncertainty about the bailout prospect for Greece and Spain, which are the two major risks in what has become the euro zone's three-year-long debt crisis, also undermined investors' risk appetite.
The MSCI index of Asia-Pacific shares outside Japan inched down 0.1 percent. Australian shares were down 0.2 percent, and South Korean shares fell 0.3 percent. Tokyo's Nikkei average opened down 0.4 percent, hitting a fresh one-week low.
"The German data is just the latest sign of a global slowdown and is likely to drag on the market today, The German Ifo institute's monthly business sentiment index fell for a fifth successive month in September to its lowest level since early 2010, with the outlook component touching its worst level since May 2009.
This lends support to the thesis that the weaker growth outlook is spreading to the EU core,
Caterpillar, the world's largest maker of earth-moving equipment, cited weakness in the world economy when cutting its 2015 earnings forecast, raising the possibility of weak guidance from other firms as U.S. earnings reporting season approaches.
The International Monetary Fund's Managing Director Christine Lagarde said on Monday the IMF is set to cut its forecast for global growth next month when it updates its projections for the world economy. The IMF/World Bank meetings will be held in Tokyo on October 12-14.
WEAK FUNDAMENTALS
Markets had welcomed additional stimulus packages from the U.S. Federal Reserve and the Bank of Japan, as well as the European Central Bank's move aimed at easing the burden of heavily indebted euro zone states seeking aid.
But investors soon returned their focus back to the weak economic fundamentals which drove central banks into action in the first place.
Deputy finance ministers and central bankers of the Group of 20 wealthy and leading emerging nations agreed that central bank stimulus was not enough to fix the ailing global economy, and governments must increase their efforts to boost growth.
Safe-haven assets rose on Monday, pushing U.S. Treasury yields lower and boosting the yen against the dollar to a one- week high of 77.805 yen. The yen traded at 77.82 on Tuesday.
The dollar index measured against a basket of key currencies also rose to a 1-1/2 week high of 79.765 on Monday. The dollar index traded at 79.490 on Tuesday.
The euro steadied around $1.2939, after hitting a 1-1/2 week low of $1.2891 on Monday.
The euro weakened as investors waited for Spain to present its draft budget plan for 2013 and unveil new structural reforms, as well as the results of stress tests on the country's banking sector.
Spain has come under renewed pressure from markets, and risks a downgrade of its sovereign debt rating to junk status by ratings agency Moody's, which is expected to announce its review soon. Madrid also faces a 27.5 billion euro ($35.52 billion)refinancing at the end of October.
Spain has not made clear whether or not it would seek an external sovereign bailout, and EU officials said Prime Minister Mariano Rajoy was not expected to do so before a regional election in his native Galicia on October 21.
Another typical safe-haven asset, gold, fell as investors took profits after prices jumped to their highest since February 29 of $1,787.20 per ounce on Friday. Spot gold traded at $1,764.51 per ounce on Tuesday.
For the latest updates on the stock market, PRESS CTR + D or visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
No comments:
Post a Comment