Japanese and Australian stocks fell on Tuesday, as a downgrade of Italy’s credit rating fueled concerns about Europe’s sovereign-debt woes. But a report of fresh aid for Greece helped lift Hong Kong and Shanghai.
In Tokyo, the Nikkei 225 Index returned from holiday to dump 142.92 points, or 1.6%, to 8,721.24.
In Hong Kong, the Hang Seng Index regained 96.85 points, or 0.5%, to 19,014.80
Some optimism returned after a Greek finance ministry official said the country was close to agreement over a fresh injection of aid, according to a report in the Wall Street Journal.
Europe‘s sovereign debt crisis continues to dominate markets, experts say.
The latest hit to early Asian market sentiment came late Monday, as Standard & Poor’s cut its rating on Italy’s sovereign debt by one notch to A, with a negative outlook.
S&P cited "Italy’s weakening economic growth prospects and our view that Italy’s fragile governing coalition ... will likely continue to limit the government’s ability to respond decisively to the challenging domestic and external macroeconomic environment."
Greek default fears pressured financials in particular, with Nomura Holdings Inc down 3.9% and Daiwa Securities Group Inc. falling 2% on the Japanese market.
Westpac Banking Corp. fell 1.4%, and Macquarie Group Ltd. lost 2.3% in Sydney, while Hana Financial Group Inc. dropped 2.8% in Seoul.
Chinese banks’ Hong Kong shares were more a mixed picture, with Industrial & Commercial Bank of China Ltd. losing 0.2% while Bank of China Ltd. rose 0.7%.
Reports Tuesday said that Bank of China halted foreign-exchange swaps with a number of large European banks, though accounts differed on the reasons behind the move.
Companies with relatively high exposure to Europe were also taking a hit in Tokyo, with Japanese consumer electronics giant Sony Corp. tumbling 4.1%, and Fujitsu Ltd plunging 4.2%.
Some commodity-sector firms were also losing ground across Asia, with JX Holdings Inc. down 3%, and Inpex Corp. down 3.3% in Tokyo.
In Sydney, Rio Tinto Ltd. dropped 1.9% and BHP Billiton Ltd. gave up 2.1%, while in Hong Kong, Jiangxi Copper Co. skidded 3.3%, and Angang Steel Co. slid 2.7%
In other markets;
Shanghai’s CSI 300 Composite Index picked up 10.58 points, or 0.4%, to 2,689.84
Taiwan’s Taiex Index added 11.97 points, or 0.2%, to 7,492.85
Korea’s Kospi Index tacked on 17.03 points, or 0.9%, to 1,837.97
Singapore’s Straits Times Index advanced 23.61 points, or 0.9%, to 2,780.84
New Zealand’s NZX 50 Index inched up 2.31 points to 3,290.62
Australia’s S&P/ASX 200 Index weakened 41.30 points, or 1%, to 4,040.20
