Asia shares mixed on Greek debt, Wall Street drop
Tuesday, May 17, 2011
BANGKOK (AP) — Renewed concerns about Europe’s debt, falling oil prices and U.S. technology company troubles weighed on Asian stock markets Tuesday.
Oil prices fell to near $97 a barrel, extending a two-week sell-off amid investor concern that slowing U.S. economic growth could undermine demand for crude. The dollar strengthened against the euro and the yen.
Japan’s Nikkei 225 was flat at 9,560.65, with exporters rising on a weakening yen. Sharp Corp. rose 2.2 percent, Sony was 1.1 percent higher, and Hitachi Ltd. gained 0.4 percent. Slumping shares included utilities that may have to pitch in to help Tokyo Electric Power Co. cope with financial losses following a tsunami on March 11 that destroyed one of the company’s nuclear plants.
TEPCO has been struggling for two months to bring a radiation leak from the crippled Fukushima Dai-ichi plant in northeastern Japan under control.
Overall damages are expected to be in the tens of billions of dollars (trillions of yen). Kansai Electric Power Co. lost 4.1 percent. Chubu Electric Power Co. Inc., which carried out a government request to shut down a nuclear plant considered vulnerable to tsunamis, dropped 5.7 percent.
TEPCO slid 10.7 percent. Investors dumped TEPCO shares after Moody’s Investors Service on Monday cut its credit rating on the troubled utility company to one notch just above junk status.
Stocks of late have become less appealing to many investors, given the dearth of good economic news. Sean Darby, chief Asian strategist at Nomura in Hong Kong, said traders are waiting for stock prices to bottom.
“I think people are really waiting for markets to fall back,” Darby said. “We’ve had a very good run over the last quarter.”
Hong Kong’s Hang Seng index was 0.1 percent lower to 22,935.84. South Korea’s Kospi index was flat at 2,103.57, with high-tech shares following their U.S. counterparts down.
Hynix Semiconductor Inc. dropped 2.5 percent and rival LG Electronics slipping 0.4 percent. In the U.S., technology companies were among the largest losers on Monday, with Yahoo! Inc. and Amazon.com Inc. falling by more than 4 percent.
Australia’s S&P/ASX 200 gained 0.7 percent to 4,682.70. Benchmarks in mainland China, Taiwan and New Zealand were also higher. Markets in Singapore, Thailand and Malaysia were closed for a holiday.
In New York on Monday, technology company troubles and renewed concerns about Europe’s debt dragged stocks lower, the day that European finance ministers approved $110 billion in rescue loans to Portugal. They have yet to decide on a second rescue package for Greece.
The arrest of the head of the International Monetary Fund is expected to make solving Greece’s problems more difficult. The official, Dominique Strauss-Kahn of France, had been heavily involved in trying to fix the debt crises in Portugal and Greece. He is being held without bail on charges of sexually assaulting a hotel employee in New York City.
The Dow Jones industrial average lost 0.4 percent to close at 12,548.37. The Standard & Poor’s 500 index fell 0.6 percent to 1,329.47. The Nasdaq fell 1.6 percent to 2,782.31.
Investors were awaiting some important economic reports in Washington on Tuesday, including the release of housing starts and industrial production for April, to gauge the health of the U.S. economy.
Benchmark crude for June delivery was down 30 cents to $97.07 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.28 to settle at $97.37 on Monday
In currencies, the euro weakened to $1.4170 from $1.4192 Monday afternoon in New York. The dollar gained to 81.18 yen from 80.84 yen.
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