Asia stocks weak as Europe worries linger

09-Jan-2012 Intellasia | Market Watch | 5:41 PM Print This Post

Asian shares lost ground on Monday, with concerns about Europe back on the agenda as the euro hovered around 2010 lows.

In China, Hong Kong’s Hang Seng Index HK:HSI -0.75 percent fell 1.4 percent, while the Shanghai Composite Index CN:000001 +1.63 percent declined 0.5 percent.

Elsewhere in the Asia-Pacific region, South Korea’s Kospi KR:0100 -1.16 percent dropped 1.4 percent, while Australia’s S&P/ASX 200 index AU:XJO -0.11 percent retreated by 0.5 percent. The Japanese share markets were closed Monday for a holiday.

US shares ended mostly lower on Friday, with investors looking past some upbeat US employment data after Italian bond yields rose back over the 7 percent mark, and the euro dropped below $1.27 for the first time since September 2010. See report on US stock moves Friday.

The common currency euro USD -0.04 percent remained below $1.27 in Asia on Monday, trading at $1.2688, according to FactSet data.
“Considerable risks remain of another shock over the near term,” said Daiwa Capital Markets strategists.

The Daiwa analysts said some key risks ahead included negotiations with private Greek-bond holders, upcoming elections in Greece and France and sovereign rating reviews by major credit agencies.

Meanwhile, the Nikkei business daily reported over the weekend that the Chinese government is expected to cut its economic growth target to 7 percent for 2012, which would be a downgrade from the 8 percent target issued over the last eight years.

A lower target would reflect downside risk, notably from Europe’s unfolding debt crisis, according to the report.

Steel makers were putting in a weak performance in Asia, with Angang Steel Co. HK:347 -1.84 percent ANGGY -4.31 percent down 1.8 percent in Hong Kong trading, Posco PKX -3.12 percent down 2 percent in Seoul, and OneSteel Ltd AU:OST -2.08 percent OSTLY -25.00 percent lower by 2.1 percent in Sydney..

Other resource-sector shares also generally weaker in Hong Kong amid losses for some commodity prices and a rising US dollar. Jiangxi Copper Co. HK:358 -0.72 percent JIXAY -0.66 percent fell 2.1 percent, and oil giant Cnooc Ltd HK:883 -0.93 percent CEO -0.99 percent dropped 2.4 percent.

Property firms were also under pressure, with Agile Property Holdings Ltd HK:3383 -1.21 percent [ AGPYY +7.70 percent down 3.2 percent, and Sun Hung Kai Properties Ltd HK:16 -2.09 percent [ SUHJY -0.55 percent losing 2.1 percent. -By Sarah Turner


Category: Stocks

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