Asian shares fell on Wednesday, with banks and autos trading sharply lower, as Greece’s recent call for a confidence vote and referendum raised doubts about Europe’s latest efforts to stem its debt crisis.
Hong Kong’s Hang Seng Index HK:HSI -1.30 percent lost 1.2 percent while the Shanghai Composite index CN:000001 -1.17 percent declined 1.3 percent.
Japan’s Nikkei Stock Average index JP:NIK -1.91 percent lost 1.9 percent, South Korea’s Kospi KR:0100 -1.33 percent dropped 2.1 percent and Australia’s S&P/ASX 200 index AU:XJO -0.90 percent fell 1.5 percent.
“Markets are seriously pondering a disorderly default in Greece and risk assets are tanking,” said strategists at Credit Agricole.
Financials were some of the worst performers, with HSBC Holdings PLC UK:HSBA -2.29 percent HK:5 -2.16 percent HBC -.00 percent down 2.2 percent and Bank of China Ltd also down 2.2 percent.
National Australia Bank Ltd AU:NAB -0.96 percent NAUBF +6.72 percent traded down 1.8 percent and Australia & New Zealand Banking Group Ltd AU:ANZ -1.66 percent ANEWF -7.32 percent fell 2 percent. Westpac Banking Corp. AU:WBC -1.73 percent WEBNF -7.33 percent which also posted fiscal-year earnings, dropped 2.3 percent.
Nomura Holdings Ltd JP:8604 -3.40 percent, NMR +0.79 percent which reported a second-quarter loss late Tuesday, slid 3.4 percent while Mitsubishi UFJ Financial Group Inc. JP:8306 -1.75 percent MTU -1.85 percent declined 1.8 percent in Tokyo and Hana Financial Group lost 2.3 percent in Seoul.
Financials are exposed to Europe’s debt woes and Greece’s prime minister surprised markets at the start of the week by announcing a confidence vote to be held Friday as well as a referendum on the latest European proposals to get the country’s debt under control. The referendum could be held as soon as January.
The proposals acted to stoke fears about the possibility of a Greek debt default, just days after a package of measures was announced in order to curb Europe’s debt troubles.
“While our economists expect the [Greek] government to win the confidence vote, in our view, these are risky strategies and they open the possibility that the euro area package will unravel before it even begins,” said strategists at Barclays Capital.
They added, that given recent developments in Europe “it is wise to stay close to the safe havens.”
These are widely viewed as including gold, up $15.20 to $1,727.00 an ounce in electronic trading on Wednesday, and the Japanese yen USDJPY -0.27 percent. The dollar bought 78.12 yen on Wednesday, down from Monday’s JPY 79.53 post-intervention high.
A stronger yen acts to reduce the competitiveness of Japanese exporters, and Mazda Motor Corp. JP:7261 -4.79 percent fell 4.8 percent, Nissan Motor Co. JP:7201 -3.19 percent, NSANY -2.52 percent lost 3.2 percent and Honda Motor Co. JP:7267 -4.32 percent HMC +4.65 percent traded down 4.3 percent in the auto sector on Wednesday.
Apparel firm Esprit Holdings Ltd, HK:330 -2.51 percent, which generates a large proportion of its revenue in Europe, fell 2.9 percent in Hong Kong.
Trading houses were losing ground in Tokyo. Mitsubishi Corp. JP:8058 -4.25 percent shares were down 4.3 percent while Itochu Corp. JP:8001 -3.20 percent shares lost 3.2 percent. -By Sarah Turner