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Asia stocks drop on Greek woes; Nikkei down 1.05%

Published 05/15/2012, 11:23 PM
Updated 05/15/2012, 11:26 PM
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Investing.com - Asian stocks fell on Wednesday on continued fears that a Greek political impasse will push the country out of the eurozone and threaten growth in Europe, a key Asian export market.

During Asian trading on Wednesday, Hong Kong's Hang Seng Index was down 2.54%, Australia's S&P/ASX200 was down 1.96%, while Japan’s Nikkei 225 Index was down 1.05%.

Negotiations among Greek political parties broke down in Europe earlier, with austerity serving as the chief hurdle.

Leftist parties have insisted austerity measures are hurting the country regardless of the bailout money they bring in, and want to scrap bailout terms that call for spending cuts and public-sector layoffs.

An interim Greek government will likely be appointed shortly, new elections will likely take place in June, and markets are growing concerned politicians opposed to austerity will take the upper hand at the polls.

Rejection of austerity could mean an end to bailout money and Greece scrapping the euro.

Meanwhile in Japan, core machinery orders fell 2.8% in March, while slightly less than market expectations for a 3.5% decline, it was enough to fuel selling in equities markets.

Meanwhile in Australia, the Westpac consumer confidence index rose by 0.8% in May, and while an improvement, confidence was still down from a year ago.

In Hong Kong, the top decliners included China Unicom, down 5.25%, Li & Fung, down 5.23%, and Bank of East Asia, down 3.94%.

In Australia, the top decliners included Toll Holdings, down 14.87%, Aquarius Platinum, down 11.46%, and Paladin Energy, down 9.73%.

European stock futures indicated a mixed opening.

France's CAC 40 futures pointed to a gain of 0.13%, while Germany's DAX 30 futures signaled a loss of 0.06%. Meanwhile, in the U.K., the FTSE 100 futures indicated a loss of 0.08%.

Dow Jones Industrial Average futures were up 0.04% while the S&P 500 futures were up 0.05%.

Later Wednesday, the U.S. will release official data on building permits and housing starts, followed by Federal Reserve data on the capacity utilization rate and industrial production.

Crude inventory data will publish as well the minutes of the Fed’s latest policy meeting.

Japanese gross domestic product growth figures are due out as well, which could move the pair.

Meanwhile the Melbourne Institute will release its inflation expectations index, which will shed light on expectations for changing consumer prices over the next 12 months.







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