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Asian markets sharply down on recession fears

Asian markets sharply down on recession fears

October 3rd, 2011 in News

BANGKOK (AP) - Asian markets tumbled sharply in early trading Monday, hurt by data suggesting debt-strapped Greece's attempts at austerity were not yielding results and a weakening economic picture in Europe.

Japan's Nikkei 225 fell 2.3 percent to 8,503.88, with a government survey showing an improvement in business confidence among Japanese manufacturers doing little to nudge markets back to life. Hong Kong's Hang Seng index fell 4.1 percent to 16,866.76. Australia's S&P ASX 200 fell 2.2 percent to 3,921.90.

Markets in mainland China and South Korea were closed for national holidays.

A deeper-than-expected recession prevented Greece from meeting this year's deficit target of 7.8 percent, the government said over the weekend.

Greece's deficit for 2011-2012 is expected to reach 8.5 percent of gross domestic product, or (euro) 18.69 billion ($25.2 billion).

Meanwhile, inflation jumped to a startling 3 percent in September in the 17 countries that use the euro. The increase was a surprise that makes it less likely the European Central Bank will cut interest rates this week to head off a possible recession.

The rate reported Friday from the European Union's statistics agency was the highest since October 2008 and represented a big increase from August's 2.5 percent.

The ECB, the chief monetary authority for the euro countries, has come under pressure to cut interest rates soon to ward off mounting signs of recession in the eurozone economy.

Benchmark oil for November delivery fell 69 cents to $78.51 per barrel on the New York Mercantile Exchange.

The contract closed down $2.94, or 3.6 percent, to end the day at $79.20 per barrel in New York. Prices haven't finished that low since Sept. 29, 2010. Crude peaked near $114 a barrel in May of this year but has since fallen 31 percent - as worries grow about the global economy.

In currencies, the euro fell to $1.3336 from $1.3424 late Friday in New York. The dollar slipped to 76.97 from 77.08 yen.