Greek woes hit Asian shares, euro down

Greek woes hit Asian shares, euro down

Hong Kong: A tumble in global stocks spread to Asia on Wednesday on heightening fears that Greece’s debt woes could spread to other countries.

“One gets the feeling that the euro zone is turning out to be a basket case and of course rumours about Spain and Portugal’s sovereign debt isn’t helping. I suspect the market wants to take the euro to as low as $1.25 in the short term," said Joanthan Cavenagh, currency strategist at Westpac, Sydney.

The euro fell to a one-year low of $1.2936 in Asian trade, having fallen past key support around $1.3000 on Tuesday when it lost over 1.5%.

The MSCI index of Asia ex-Japan stocks was down over 1.5%. Markets in Japan, Korea and Thailand are closed.

Australian stocks tumbled 1.8%, the steepest fall in three months, with the resources sector leading losses. Hong Kong’s Hang Seng opened about 2% lower.

The US dollar was a major beneficiary of risk aversion with its index up 0.28%, on top of a 1.4% rise on Tuesday. That was the biggest daily gain so far this year and took the index to the highest since May 2009.

Euro/yen hovered around recent lows just below ¥123, having lost over 1.6% in the previous session. The Aussie/yen was down at ¥86.21, having shed nearly ¥2 on Tuesday.

Oil extended losses, briefly falling below $82, following the steepest one-day%age loss in three months on Tuesday on rising inventories and a rising dollar.

In Athens, striking public workers challenged Greece’s €110 billion ($146.5 billion) bailout-for-austerity deal, starting a 48-hour national strike that shut down ministeries, tax offices, schools, hospitals and public services.

The risk premium on Greek, Portuguese and Spanish bonds soared overnight amid jitters about a possible Greek debt restructuring and worries over the fiscal health of other southern European countries.

US shares slid steeply overnight with the Standard & Poor’s 500 index tumbling 2.4%, echoing drops in Europe where Spain was down 4.6%.