Hong Kong: Asian markets fell on Friday as traders grew nervous over Greece’s chances of avoiding a default after eurozone chiefs withheld a new bailout and ordered Athens to agree more swingeing cuts.
The decision to put off ratification of the rescue cash gives Greece just under a week to meet three new criteria and came despite the country’s politicians finally agreeing on other austerity measures.
Tokyo slipped 0.25%, Hong Kong shed 0.40%, Sydney was 0.55% off, Seoul gave up 0.86% and Shanghai was down 0.17%.
Despite Greek politicians agreeing after lengthy talks on a tough set of cuts demanded by international lenders Finance Minister Evangelos Venizelos was told by Brussels more needed to be done to qualify for the €130 billion ($171 billion) bailout.
Eurogroup chief Jean-Claude Juncker told a news conference: “Despite the important progress achieved over the last days we did not have yet all necessary elements on the table to take decisions today.”
The finance chiefs urged the Greek parliament to approve the austerity measures agreed by the political parties when it convenes on Sunday.
They also called for additional structural spending cuts of €325 million for 2012 and a written pledge from coalition leaders that they will implement austerity measures.
Failure to agree the measures and qualify for the cash could see Athens default on its debt repayments, which many fear could lead it to leave the eurozone and lead to another global financial catastrophe.
Greece is, however, close to finalizing a debt writedown with its private lenders, hoping to slash €100 billion from its €350 billion debt mountain. EU economic affairs commissioner Olli Rehn said the writedown was near.
“We’ve had a nice run up in risk assets this year, but we’ve got a lot of event risk this weekend, so investors aren’t prepared to commit any more money to equities at this point,” said Sydney-based IG Markets institutional dealer Chris Weston.
“The fact that Greece has agreed on fresh austerity measures is positive, but European officials appear sceptical, and we need to see Greek lawmakers vote through the austerity measures this weekend,” he told Dow Jones Newswires.
On forex markets the euro stood at $1.3273 and ¥102.98, from $1.3286 and ¥103.20.
The dollar bought ¥77.57, down from ¥77.68.
Adding to the downbeat sentiment in Sydney was news that mining giant Rio Tinto reported a 59% dive in annual net profit, which came two days after rival BHP Billiton also saw underwhelming earnings for the year.
New York’s main contract, West Texas Intermediate crude for delivery in March, fell 27 cents to $99.57 per barrel and Brent North Sea crude for March settlement was down 17 cents at $118.42.