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Greek referendum disappoints markets

Tuesday, November 01, 2011 - 01:55

Nov. 1 - Greece's shock announcement of holding a referendum and China's weaker-than-expected factory activity dampen investor appetite, sending Asian shares lower. Toshi Maeda reports.

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Asian shares dropped Tuesday (November 1) after investor appetite was dampened on news Greece's Prime Minister would hold a surprise referendum on a week-old EU bailout deal. The MSCI Asian Pacific shares index was down 1.7 percent by mid-day as investors took profits after a sharp rally last week. Just a week ago, euro zone leaders agreed to hand Athens a second, multi-billion-euro bailout and a 50-percent write-down on its enormous debt. But Greek Prime Minister George Papandreou said Monday (October 31) he needed more political support to meet the fiscal and structural demands of international lenders. Analysts say the referendum is likely to be held early next year. Besides renewed worries about the European debt crisis, China's weaker-than-expected factory output data released Tuesday (November 1) also disappointed investors. China's factory activity in October was its slowest since February 2009, reminding investors of the risks to the world's No. 2 economy from a sagging global backdrop. In Hong Kong, developers remained under pressure with the sector sub-index down 2 percent. Japan's Nikkei index ended down 1.7 percent following the failure of U.S. trading firm MF Global Holding. Panasonic declined almost 5 percent after the electronics maker forecast a full-year net loss of $5.5 billion, its biggest in a decade. Market players were also keeping close watch on the yen - a day after Japanese authorities reportedly sold a record 10 trillion yen to weaken the currency ahead of a G20 summit this week. Toshi Maeda, Reuters.

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Greek referendum disappoints markets

Tuesday, November 01, 2011 - 01:55