HONG KONG - Asian markets tumbled Monday and the
euro was further pressured by nagging uncertainty over the eurozone
as leaders of the debt-troubled region struggle to find a plan to
solve the crisis.
The week got off to a poor start as investors were left unimpressed
by a commitment at the weekend from G20 finance chiefs to take
strong, coordinated action to avoid another global financial
crisis.
And they are even more nervous as Europe heads into a crunch week
that will be key to the future of the region.
Tokyo fell 2.17 percent, or 186.13 points, to 8,374.13, Seoul shed
2.64 percent, or 44.73 points, to 1,652.71 and Sydney ended 1.01
percent, or 39.3 points, off at 3,863.9.
Hong Kong shed 1.48 percent, or 261.03 points, to 17,407.80, while
Shanghai ended 1.64 percent, or 39.98 points, lower at
2,393.18.
Bangkok shed 5.65 percent, or 53.10 points, to end at 904.06.
The losses extended those from last week, when some global indexes
were sent tumbling to multi-year lows because of the ongoing
European crisis as well as concerns over US economic growth.
The G20 meeting in Washington issued an emergency statement saying:
"We... are committed to a strong and coordinated international
response to address the renewed challenges facing the global
economy.
"We are taking strong actions to maintain financial stability,
restore confidence and support growth."
However, despite moves to shore up confidence in Greece, many fear
the country will inevitably default on its loans, which could in
turn spread to other economies and lead to another financial
downturn.
Mitul Kotecha, a strategist at Credit Agricole, said: "A pledge by
G20 officials to help combat the crisis gave some support to
markets but given that there were no details on how this would be
done, it will not do much to alleviate market stress without some
concrete action."
Teppei Ino, an analyst at the Bank of Tokyo-Mitsubishi UFJ, said
the group "came short of mapping out any measures with immediate
effects so have failed to stop the market's selling of risky
assets".
A senior dealer at a major Japanese trust bank told Dow Jones
Newswires: "Uncertainty will likely persist."
The sell-off comes as the eurozone faces a challenging week with
European and IMF experts due to resume a fiscal audit that will
decide if Athens can access the latest tranche of rescue funds to
escape default.
And German lawmakers will Thursday vote on a beefed-up European
Union stability fund that would permit sovereign debt
restructuring, which the eurozone looks increasingly likely to
need.
That vote is two days after Greek Prime Minister George Papandreou
visits Berlin for talks with Chancellor Angela Merkel amid
speculation that a second, multi-billion euro bailout for Athens
crafted in July will need to be revised.
The euro slumped to US$1.3420 in Tokyo afternoon trade from
US$1.3503 late Friday in New York while it also hit 102.65 yen from
103.31. The single currency was, however, up slightly from the
10-year-low 101.94 yen seen earlier.
The dollar was slightly lower at 76.48 yen compared with 76.50
yen.
The greenback also extended gains against the commodities-linked
Australian dollar. The Aussie -- which just over two months ago hit
a record above US$1.10 -- slid to 96.93 US cents late in the
session, down from 98.34 cents on Friday.
On oil markets New York's main contract, West Texas Intermediate
(WTI) for delivery in November, fell US$1.16 to US$78.69 per barrel
in late afternoon trade.
Brent North Sea crude for November delivery slipped US$1.32 cents
to US$102.65.
Gold tumbled to US$1,599.98 an ounce by 0800 GMT, well down from
the US$1,734.86 it was at by 0900 GMT Friday, with analysts saying
dealers were cashing in their investments and shifting into the US
dollar as a safe haven.
It was also being sold after CME Group, which runs the online
trading platform for gold, said it would raise the amount of
collateral for dealers trading the precious metal.
In other markets:
-- Singapore ended 1.65 percent or 44.49 points off at
2,654.31.
-- Manila slumped 4.24 percent, or 164.74 points, to 3,721.22, its
lowest close since September 2010.
-- Taipei closed 2.40 percent, or 169.10 points, lower at
6,977.12.
-- Wellington closed down 0.83 percent, or 27.34 points, at
3,255.37.
-- Kuala Lumpur lost 2.50 percent, or 34.14 points, to close at
1,331.80.
-- Jakarta fell 3.22 percent, or 110.20 points, to 3,316.14.
