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Asian markets down as Greek risks dominate

Tuesday, May 15, 2012 - 02:03

May 15 - Asian stocks and commodities lower, as Greek parties struggle to resolve differences over austerity reforms needed to form a workable government. Arnold Gay reports.

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Asian markets fell for a second day this week, with the Greek political crisis fanning fears all progress made to solve Europe's debt crisis would unravel. News that Greek parties would head into another day of cliff-hanging talks sent Asian stocks down by as much as 1.3 percent, Safe haven currencies like the U.S. dollar and the yen stayed well bid with the dollar index scaling a four-month peak of 80.739. The materials sector was the worst performer, dragging down resource-reliant Australian shares, while exporters with high exposure to Europe sent Japan's Nikkei average plummeting over one percent. A growing sense of China's deceleration weighed on sentiment further. JPMorgan's Adrian Mowat says the overall picture for the Chinese economy is mixed. (SOUNDBITE) (English) JPMORGAN'S CHIEF ASIAN AND EMERGING MARKETS STRATEGIST, ADRIAN MOWAT, SAYING: "I think it's quite bad with a significant number of industries that are contracting, we look at things like truck sales which are down year-over-year in the first quarter, car sales down year-over-year. If you look at residential property sales, measuring that in millions of square meters, that's down 17% year over year. So part of the Chinese economy is already contracting, yet in contrast, if you look at low-end consumption, that's doing very well. China's got a tight labor market, so we got wage increases plus we've also got a decline in inflation, so for the perspective of the authorities, it looks like quite a good environment because the population would be happy about the current economic trends." Stocks in Hong Kong battled to break an 8-day losing streak, and were up about by about a fourth of a percent in early afternoon trade. The previous longest losing streak was over 25 years ago, when the benchmark fell for 11 straight days. South Korea's Kospi and the won slipped to fresh 4-month lows, as Athens struggles to to secure a working government after elections held nine days ago. Arnold Gay, Reuters.

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Asian markets down as Greek risks dominate

Tuesday, May 15, 2012 - 02:03