HONG KONG (MarketWatch) — Most Asian markets extended their recent decline Tuesday as fresh concerns about Europe, including a possible bailout for Cyprus, emerged in the run-up to this week’s European crisis summit.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.58% ended down 0.8%, bringing its week-to-date losses to 1.5%, while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.13% slipped 0.4% for a loss of 1.6% since Friday evening.
Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO +0.11% dipped 0.4%, losing 0.9% so far this week.
China’s Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -1.37% lost 0.1% and Taiwan’s Taiex gave up 0.4% while Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.45% ended 0.5% higher after a volatile trading session that saw the benchmark swing in both directions.
India tries to revive the rupee
India's central bank raises the foreign-investment cap on government bonds, to little effect.
Asian losses Monday had spread to the U.S. overnight, on faded hopes that a European Union meeting due to start Thursday would produce a blueprint for tackling the region’s problems, and as Cyprus became the latest European country to request financial aid. Read more on Cyprus.
“Risk assets continued their slide ahead of this week’s European Union summit,” said Barclays Capital strategists. “We believe the EU summit ... will yield more strong rhetoric in support of a road map toward tighter fiscal integration rather than the endpoint itself.”
Chances of successful negotiations between Greece and its European partners at the summit also appeared to diminish Monday, after the country’s finance minister reportedly resigned just four days after being appointed to the position and three days after hospitalization for nausea and dizziness. Read more on Greek finance minister’s departure.
Concern about Europe helped make blue-chip exporters among Asia’s major decliners Tuesday.
Car makers took a hit, as Honda Motor Co. /zigman2/quotes/200490352/delayed JP:7267 +1.09% /zigman2/quotes/207173990/composite HMC +0.42% fell 1.5% and Toyota Motor Co. /zigman2/quotes/203803129/delayed JP:7203 +1.18% /zigman2/quotes/200537742/composite TM +1.05% lost 1.1% in Japan, while Hyundai Motor Co. /zigman2/quotes/204364212/delayed HYMTF +0.77% fell 1% and affiliate Kia Motors Corp. /zigman2/quotes/205439169/delayed KIMTF +8.21% slid 1.6% in South Korea.
Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 +2.06% dropped 2.9%, and Panasonic Corp. /zigman2/quotes/201785256/delayed JP:6752 +2.62% , traded down 1% in Tokyo, with the pair failing to get a boost from an announced tie-up to develop next-generation OLED televisions. Read more on Sony-Panasonic alliance.
Some reports cast the move as an effort to compete with Korean electronics giant Samsung Electronics Co. /zigman2/quotes/202367843/delayed SSNLF 0.00% , which rose 0.6% in Seoul, managing to take back a portion of the sharp losses made in the previous session, following reports of pressure on its earnings.
A stronger yen also hurt many Japanese names, with Fujifilm Holdings Corp. /zigman2/quotes/209829801/delayed JP:4901 +0.08% /zigman2/quotes/209928981/delayed FUJIF +1.77% falling 3.1%, while Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 +1.12% /zigman2/quotes/207472799/delayed SHCAF +0.24% lost 2.9%, as the dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0081% bought 79.50 yen, down from its ¥80.46 level at the end of last week.
The yen is often sought as a safe haven when riskier assets sell off, along with the U.S. dollar. The U.S. currency gained on Monday, and commodities — which are mostly priced in dollars and often move inversely with the dollar — came under some pressure.
Benchmark U.S. oil futures remained close to $79 a barrel mark in Asian electronic trading on Monday, dragging on some energy shares. Japan’s Inpex Corp. /zigman2/quotes/206689846/delayed JP:1605 -0.92% /zigman2/quotes/206936121/delayed IPXHF +7.28% dropped 0.8%.
Australian energy firms declining included Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL -1.06% /zigman2/quotes/206770672/delayed WOPEF +2.66% , down 1.4% and Linc Energy Ltd, , lower by 3.9%.