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Asian stocks decline in early trade; Nikkei falls 0.7%

Stock MarketsOct 11, 2011 10:10PM ET
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This article has already been saved in your Saved Items - Asian stocks moved lower in Wednesday trade, dragged down by sagging financial issues after Slovakia voted overnight to reject expansion of the USD600 European debt bailout fund.

During early Asian trade, Hong Kong’s Hang Seng Index lost 1.1% to 17,945.44, Japan’s Nikkei Index fell 0.73% to 8,711.68, while Australia’s S&P/ASX 200 retreated 1.3% to 4,173.30. 
The Topix Index of all shares listed on the first section of the Tokyo Stock Exchange, declined 0.72% to trade at 749.64.
Slovakia’s Parliament, late Tuesday, voted against expansion of the European Financial Stability Facility, raising new concerns over the region’s ability to stem the spread of debt in the euro-zone.

The vote-down had been widely expected, as the Slovak ruling party struggled to garner support in the legislature. Approval of the measure was anticipated later in the week.

Slovakia, the poorest member of the 17-nation common currency, remained the final member to vote on the bailout fund.

Earlier in the day, representatives of the so-called troika, the European Union, International Monetary Fund, and European Central Bank, said Greece was likely to receive its USD10.9 billion rescue tranche by early November, allowing Athens to avert default.

European finance officials warned that Greece’s 2011 fiscal target was no longer attainable, providing additional pressure on the government to employ further austerity measures through 2014.

Meanwhile, European Commission President Jose Manuel Barroso said he was prepared to unveil a plan for recapitalizing European banks later Wednesday. 

Wall Street shares ended Tuesday’s session mixed, with the Dow Jones Industrial Average shedding 0.15%, while the Nasdaq Composite Index gained 0.66%, and the S&P 500 rose by 0.05%.

On Wednesday, the Japanese Cabinet Office reported that core machinery orders jumped 11% in August, following an 8.2% drop in July, and far exceeding market forecasts of a 3.9% gain for the month.

In Australia, the Westpac-Melbourne Institute reported that its Index of Consumer Sentiment rose marginally in October, up 0.4% to 97.2, and the second consecutive month of gains for the index.

Bank shares in the region took hits following the news from Europe, with HSBC Holdings PLC. falling 2.1%, Westpac Banking Corp. down 1.8% and Mitsubishi UFJ Financial Group Inc. losing 1.2%.

Wall Street losses from Dow component Alcoa Inc., down 5.3% in Tuesday trade on disappointing earnings, delivered downward pressure on Asian resource and material firms. BHP Billiton Ltd. fell 2.3%, and Sumitomo Metal Mining Co. dropped 3.5% in Tokyo trade.

Japanese camera manufacturer Nikon Corp. slumped 5.5% after announcing a suspension of production in Thailand due to the worst flooding in the country in nearly 50 years.

The outlook for European stocks was pessimistic. France’s CAC 40 futures was lower by 0.31% to 3,131.80, Britain’s FTSE 100 futures fell 0.56% to 5,328.20, while Germany’s DAX futures declined 0.42% to 5,827.10.

Asian stocks decline in early trade; Nikkei falls 0.7%

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