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Asian markets tumble on unrest over Greek crisis

Asian markets tumble on unrest over Greek crisis
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First Published: Thu, Jun 16 2011. 09 02 AM IST
Updated: Thu, Jun 16 2011. 09 02 AM IST
Hong Kong: Asian stocks tumbled on Thursday, hammered by violent unrest in Greece amid the country’s deteriorating debt crisis and a disappointing US manufacturing report.
Oil prices tumbled below $96 a barrel amid fears of sputtering US economic growth, which would dampen demand for crude.
The dollar sank against the euro and was unchanged against the yen. Asian markets followed their European and US counterparts lower after rioters clashed with police in Athens over proposed austerity measures and coalition talks between Greece’s government and opposition parties collapsed, renewing fears of a government debt default.
In the US, a report on manufacturing in the New York area also came in far below forecasts.
That reignited fears that factory production, one of the few bright spots in the US economy, may be weaker than many economists had believed. Japan’s Nikkei 225 stock fell 1% to 9,494.15 by midmorning while South Korea’s Kospi fell 1.7% to 2,050.28.
Hong Kong’s Hang Seng dropped 1.5% to 22,010.61.77, while the Shanghai Composite Index lost 0.8% to 2,683.06. Benchmarks in Taiwan, Singapore and New Zealand also dropped.
“In summary, it’s going to be a very weak day locally as deterioration in macro issues offshore weighs on overall sentiment,” said Ben Potter of IG Markets in Melbourne.
The Greek debt crisis sent US stocks tumbling Wednesday while sending the dollar up 2% against the euro. If Greece defaults on its debt, it could cause the dollar to strengthen even further against the euro.
That would make products made by US companies more expensive abroad and drag down their profits. On Wall Street, stocks tumbled after the June Empire State Manufacturing Survey came in well below forecasts.
The survey from the New York Federal Reserve found that conditions for New York manufacturers are weakening and orders are falling. A measure of optimism among factory owners in the state fell to its lowest level since early 2009.
The Dow Jones industrial average fell 1.5% to close at 11,897.27. The drop erased all of its 123-point gain from Tuesday and put the average on track for a seventh straight week of losses.
The S&P 500 index fell 1.7% to 1,265.42. The Nasdaq fell 1.8% to 2,631.46. Benchmark crude for July delivery was down 65 cents to $98.94 in electronic trading on the New York Mercantile Exchange on Wednesday.
The contract gained $1.89 to settle at $99.59 a barrel on Tuesday. In currencies, the euro rose to $1.4192 from $1.4169 in late trading Wednesday in New York. The dollar was little changed at 80.96 Japanese yen.
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First Published: Thu, Jun 16 2011. 09 02 AM IST
More Topics: Asia | Wall Street | Oil | Dow Jones | Stocks |