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Asian stocks sideways after Portugal rating cutWorld stocks lower as investors focus on Europe

Asian stocks sideways after Portugal rating cutWorld stocks lower as investors focus on Europe

July 6th, 2011 by KELVIN CHAN, AP Business Writer in News

HONG KONG (AP) - Global stock markets were mostly lower Wednesday as investors focused attention on Europe's debt crisis as bankers worked out how they would contribute to a rescue for debt-riddled Greece.

Oil fell below $97 a barrel while the dollar weakened against the yen and euro.

In early trading, the FTSE 100 index of leading British companies was down 0.5 percent to 5,997.22 while Germany's DAX fell 0.3 percent to 7,416.08. The CAC-40 in France was 0.5 percent lower at 3,959.40. U.S. stocks were also poised to fall. Dow futures were down 0.3 percent to 12,498 while S&P 500 futures were down 0.3 percent to 1,332.40.

In Asia, Japan's Nikkei 225 index rose 1.1 percent to end at 10,082.48 - above the psychologically important 10,000 mark for the second time this week - while South Korea's Kospi rose 0.4 percent to end at 2,171.19. Hong Kong's Hang Seng Index fell 1 percent to close at 22,517.55.

Benchmarks in Taiwan and Australia also rose but those in New Zealand, Singapore, Thailand and Indonesia were lower.

Trading in Asia lacked direction as many markets flip-flopped back and forth between positive and negative territory.

Mainland Chinese shares were mixed in moderate trading. The Shanghai Composite Index lost 0.2 percent to finish at 2,810.48, while the Shenzhen Composite Index gained 0.4 percent to 1,200.58. Shares in electronic components, information technology and food-related companies led the gains while financials weakened.

News reports said Temasek Holdings Pte., Singapore's state-owned investment company, raised HK$28.2 billion after dumping stakes in China Construction Bank Corp. and Bank of China Ltd., two of the mainland's three biggest banks. Analysts said the sale would have a short-term impact.

Bank of China, lost 1.3 percent while China Construction Bank Corporation lost 1.4 percent.

European bankers are meeting Thursday to discuss terms under which they would buy up new Greek bonds to shore up the country's finances.

Many investors were looking ahead to a meeting by the European Central Bank on Thursday at which it is expected to raise its main interest rate by a quarter of a percentage point. Investors were also sitting on the sidelines ahead of U.S. jobs data on Friday.

Meanwhile, credit ratings agency Moody's downgraded Portugal's government debt to "junk" status after trading closed in Europe on Tuesday. The agency cited concerns that the country will not be able to meet targets to reduce its deficit due to the "formidable challenges" it is facing in cutting spending.

"For today, the overall Asia market is still waiting the next move of the European markets and the U.S. markets," said Linus Yip, chief strategist at First Shanghai Securities.

In currencies, the euro rose to $1.4452 against the dollar from $1.4410 late Tuesday. The dollar fell to 80.86 Japanese yen from 81.04.

Benchmark oil for August delivery fell 37 cents to $96.53 a barrel in electronic trading on the New York Mercantile Exchange. Crude gained $1.95 to settle at $96.89 on Monday.