Hong Kong

Asia falls even as Wall Street gains :Europe’s debt crisis continues to spook stock traders

Asian stock markets fell Wednesday despite gains on Wall Street and in Europe the day before as simmering worries over Europe’s debt crisis cast a pall over trading.

Japan’s Nikkei 225 index, Asia’s largest stock market, extended earlier losses to fall 1.1 per cent to 8,524.12, while Hong Kong’s Hang Seng declined 1.3 per cent to 18,775.39.

Markets have been going through wild swings amid worries over whether Greece may default, a development that could reverberate through other troubled European economies such as Italy’s as well as damage the region’s banking system.

Investors in Europe and the US took a measure of relief, however, after signs Tuesday that European leaders would do what it takes to avoid such a scenario.

German Chancellor Angela Merkel indicated the debt-ridden country was making progress in meeting the demands of international creditors. Her comments came ahead of a teleconference Wednesday with French President Nicolas Sarkozy and Greek Prime Minister George Papandreou.

Asian investors, however, remained cautious about the outlook for any marked improvement in Europe’s sovereign debt woes.

“There is no signal to show the crisis will end,” said Castor Pang, Hong Kong-based head of research at Core Pacific-Yamaichi, a Taiwan brokerage. “That’s why most of the investors are becoming more and more pessimistic.”

Mainland China’s Shanghai Composite Index fell 0.5 per cent to 2,458.42. Property shares were hurt as investors continued to fret over possible credit tightening by China’s central bank to counter inflation, which is hovering near three-year highs.

Hong Kong-listed China Overseas Land & Investment tumbled 7.7 per cent while China Resources Land Ltd. fell 6.2 per cent.

South Korea’s Kospi was the region’s biggest loser, declining 2.7 per cent to 1,764.04 as movements were magnified after a two-day holiday.
Samsung Electronics Co. slid 3.2 per cent. Hyundai Heavy Industries Co. plunged 4.3 per cent.

Markets in Australia and New Zealand also fell. Benchmarks in Malaysia, Vietnam and Bangladesh bucked the negative trend.

In New York, the Dow Jones industrial average rose 0.4 per cent to close at 11,105.85 on Tuesday. The Standard & Poor’s 500 index gained 0.9 percent to 1,172.87.

The technology-focused Nasdaq composite index rose 1.5 per cent to 2,532.15.

Europe’s main bourses also rose Tuesday. In currencies, the dollar weakened Wednesday to 76.86 yen from 76.94 yen late in New York on Tuesday. The euro fell to $1.3633 from $1.3693.

Oil prices fell below $89 a barrel Wednesday in Asia after a U.S. crude supply report showed mixed signs about consumer demand.

Benchmark oil for October delivery was down $1.44 to $88.77 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.02 to end at $90.21 per barrel on the Nymex on Tuesday.

In London, Brent crude for October delivery was down 60 cents at $111.29 on the ICE Futures exchange

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