HONG KONG - Asian markets tumbled Monday and the euro fell against the greenback as anxious traders fear European leaders will not be able to find a solution to the region's debt 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, co-ordinated 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.
Some early losses were clawed back, however, thanks to bargain-buying.
Tokyo fell 2.17 per cent, or 186.13 points, to 8,374.13; Seoul shed 2.64 per cent, or 44.73 points, to 1,652.71; Sydney slid 1.01 per cent, or 39.3 points, to 3,863.9.
Hong Kong lost 1.48 per cent, or 261.03 points, to 17,407.80; Shanghai sank 1.64 per cent, or 39.98 points, to 2,393.18.
Bangkok ceded 5.65 per cent, or 53.10 points, to end at 904.06.
The losses extended those from last week, when some global indices were sent tumbling to multi-year lows because of the European crisis as well as concerns over United States 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."
Despite moves to shore up confidence in Greece, however, many fear the country will 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 selloff comes as the euro zone faces a challenging week, with European and International Monetary Fund 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 vote Thursday on a beefed-up European Union stability fund that would permit sovereign debt restructuring, which the euro zone 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, multibillion-euro bailout for Athens crafted in July will need to be revised.
The euro slumped to $1.3461 in Tokyo in Monday afternoon trading, from $1.3503 late Friday in New York, while it also hit 102.90 yen, down from 103.31. The single currency was, however, up slightly from the 10-year-low of 101.94 yen seen earlier.
The U.S. dollar was slightly lower at 76.40 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 $1.10 U.S. — slid to 97.53 cents U.S. late in the session, down from 98.34 cents Friday.
On oil markets, New York's main contract, West Texas Intermediate for delivery in November, fell $1.16, to $78.69 per barrel, in late afternoon trade.
Brent North Sea crude for November delivery slipped $1.32 cents, to $102.65.
Gold tumbled to $1,614.50 an ounce Monday morning, well down from the $1,734.86 it was at Friday, with analysts saying dealers were cashing in their investments and shifting into the U.S. 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.
Source: www.montrealgazette.com
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, co-ordinated 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.
Some early losses were clawed back, however, thanks to bargain-buying.
Tokyo fell 2.17 per cent, or 186.13 points, to 8,374.13; Seoul shed 2.64 per cent, or 44.73 points, to 1,652.71; Sydney slid 1.01 per cent, or 39.3 points, to 3,863.9.
Hong Kong lost 1.48 per cent, or 261.03 points, to 17,407.80; Shanghai sank 1.64 per cent, or 39.98 points, to 2,393.18.
Bangkok ceded 5.65 per cent, or 53.10 points, to end at 904.06.
The losses extended those from last week, when some global indices were sent tumbling to multi-year lows because of the European crisis as well as concerns over United States 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."
Despite moves to shore up confidence in Greece, however, many fear the country will 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 selloff comes as the euro zone faces a challenging week, with European and International Monetary Fund 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 vote Thursday on a beefed-up European Union stability fund that would permit sovereign debt restructuring, which the euro zone 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, multibillion-euro bailout for Athens crafted in July will need to be revised.
The euro slumped to $1.3461 in Tokyo in Monday afternoon trading, from $1.3503 late Friday in New York, while it also hit 102.90 yen, down from 103.31. The single currency was, however, up slightly from the 10-year-low of 101.94 yen seen earlier.
The U.S. dollar was slightly lower at 76.40 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 $1.10 U.S. — slid to 97.53 cents U.S. late in the session, down from 98.34 cents Friday.
On oil markets, New York's main contract, West Texas Intermediate for delivery in November, fell $1.16, to $78.69 per barrel, in late afternoon trade.
Brent North Sea crude for November delivery slipped $1.32 cents, to $102.65.
Gold tumbled to $1,614.50 an ounce Monday morning, well down from the $1,734.86 it was at Friday, with analysts saying dealers were cashing in their investments and shifting into the U.S. 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.
Source: www.montrealgazette.com
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