Asian markets down on fresh Europe fears

Asian markets down on fresh Europe fears

Hong Kong: Renewed concerns over the European debt crisis and a big fall on Wall Street hit Asian markets on Tuesday while the euro remained under pressure after suffering heavy losses overnight.

Tokyo fell 0.75% by the break, Hong Kong opened 2.03% lower, Sydney lost 1.52%, Seoul dipped 0.13% and Shanghai was down 0.73%.

After last week’s impressive global rally in the wake of a European plan to tackle its debilitating debt crisis traders have grown concerned about the lack of detail.

Jitters were further heightened after embattled Greek Prime Minister George Papandreou called Monday for a confidence vote and a referendum on last week’s deal, taking a political gamble to silence growing opposition to his policies.

An adverse result in either process would scupper the EU deal, which is designed to cut Greece’s debt load of more than €350 billion ($495 billion) by around €100 billion.

Last week’s plan also agreed to recapitalize banks to withstand the impact of a 50% loss on their Greek bonds as well as boost the European Financial Stability Facility rescue fund and provide Athens a fresh bailout.

Fears sent Wall Street tumbling, with the Dow losing 2.26%, the Nasdaq 1.93% off and the S&P 500 down 2.47%.

US traders were also spooked by news of the eurozone’s first major US casualty. Brokerage MF Global filed for bankruptcy protection following a string of losses from European public debt holdings.

The euro also slumped in New York, falling to $1.3851 late Monday, from $1.4010 earlier in Asia and to ¥108.34 from ¥110.92.

In early Tokyo trade on Tuesday it was fetching $1.3843 and ¥108.25.

The dollar was at ¥78.20, slightly up from ¥78.16 in New York but down from rates above ¥79.00 in Tokyo on Monday after Tokyo’s first yen-selling intervention since August.

The greenback soared to 79.55 Monday after the Japanese government stepped into the currency markets when the US unit hit a record low ¥75.33.

Investors were also disappointed by figures showing China’s manufacturing growth had slowed in October.

The nation’s official Purchasing Managers Index fell to 50.4 last month from 51.2 in September, below a median forecast of 51.7 from nine economists polled by Dow Jones Newswires.

The reading puts an end to two consecutive months of increases, likely indicating that growth in manufacturing activity continued to slow as a result of Beijing’s tightening measures and slowing global growth.

New York’s main contract, light sweet crude for delivery in December, was down 54 cents to $92.65 in morning Asian trade.

Brent North Sea crude for December settlement tumbled 37 cents to $109.19.