Wednesday, November 2, 2011

Asia stocks down as Greek vote plan rocks markets

BANGKOK, November 2, 2011 (Tehelkanews)

Asian stocks slumped for a third day on Wednesday, as fears intensified that Greece might reject an austerity plan and default on its massive debts.

Japan's Nikkei 225 index tumbled 1.8 per cent to 8,680.68. Hong Kong's Hang Seng dropped 1.1 per cent to 19,163.93 and South Korea's Kospi index sank 1.1 per cent to 1,888.53. Australia's S&P/ASX 200 index lost 0.5 per cent to 4,210.40.Benchmarks in mainland China, Taiwan, Indonesia and Malaysia also fell.

A wave of selling swept across global markets on Tuesday, a day after Greece's Prime Minister said he would call a national vote on an unpopular European plan that would entail painful tax increases and drastic welfare cuts to slash the country's massive debts and prevent it from defaulting.A top European official warned that Athens could be left to go bankrupt if it went through with the vote and experts said the broader deal which hopes to protect larger countries such as Italy from financial markets panic could collapse.

Ultimately, Greece could leave the euro currency union, causing massive financial havoc and pushing the global economy back into recession.That prospect could be enough to keep the referendum from happening Papandreou's government could collapse before the proposal goes through, having lost huge amounts of support from its own party.The Dow fell 2.5 per cent to close at 11,657.96 on Tuesday. It was the biggest drop since Sept. 22. The S&P 500 lost 2.8 per cent to 1,218.28. The Nasdaq composite dropped 2.9 per cent to 2,606.96.Japan's powerhouse export sector fell sharply, a day after data showed that U.S. manufacturing grew more slowly in October, hampered by weak demand for exports.

Mazda Motor Corp. tumbled 4.8 per cent, Panasonic Corp. lost 3.8 per cent and Sharp Corp. fell 3.5 per cent.Japanese utility Tokyo Electric Power Co. fell 3.9 per cent after saying there may be signs of fresh nuclear fission in the No. 2 reactor at its disaster-damaged Fukushima Daiichi power plant, Kyodo News Agency said.Benchmark crude for December delivery was down 84 cents at $91.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1 to settle at $92.19 in New York on Tuesday.

In currency trading, the euro fell to $1.3710 from $1.3715 late Tuesday in New York. At one point the euro fell to $1.3607, its lowest point since Oct. 12. The euro is down nearly 4 per cent after hitting a seven-week high Thursday, when the European financial rescue plan was announced.The dollar slipped to 78.15 yen from 78.33 yen.

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