MUMBAI (MarketWatch) — Asian shares fell Thursday, as investors fretted about the possibility of a messy Greek default, although Japanese shares found some support from a relatively weak yen.
The Australian S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -0.33% dropped 1.6%, the South Korean Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% fell 1.4%, and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.09% lost 0.4%.
U.S. shares ended firmly lower on Wednesday, with minutes from the latest Federal Reserve interest-rate meeting dashing hopes for an imminent round of further quantitative easing and as uncertainty lingered over the prospects for Greece.
Reports suggested that some euro-zone nations were considering delaying Greece’s next bailout package until after the country holds elections — expected to take place in April. At the same time, arrangements would be made to help the country avoid disorderly default, the reports said. See report on latest Greek bailout news.
Xi seeks to charm Capitol Hill critics
Chinese Vice President Xi Jinping visits Capitol Hill, where he hears congressional leaders voice strong concerns about economic issues and human rights. Photo: Getty Images
Eurogroup President Jean-Claude Juncker later said he was confident that Greece would get its next tranche of aid by Monday, on schedule.
“There’s a lot of bad news out there that people have to take into account, and I think that people will take in this opportunity to lock in some gains,” said Andrew Sullivan at Piper Jaffray.
“Europe should be worrying people,” said Sullivan, adding however that “it’s obvious that Greece can’t afford to stay in the euro.”
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0206% bought ¥78.73 yen on Thursday in East Asia, up from ¥78.37 in late North American trading Wednesday and well above its ¥77.60 mark Monday. Read more on currencies.
The relatively weak yen helped some major Japanese exporters add to their recent advance, as Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 -0.54% /zigman2/quotes/207472799/delayed SHCAF +3.24% climbed 1.1%, and Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 -0.57% /zigman2/quotes/208567357/composite SNE -1.20% rose 0.9%.
However, Olympus Corp. /zigman2/quotes/200860615/delayed JP:7733 -1.61% /zigman2/quotes/203009041/delayed OCPNF +18.09% lost 2.4% after the arrest of ex-chairman Tsuyoshi Kikukawa and other former executives Thursday in connection with the firm’s unfolding fraud scandal. See report on Olympus arrests.
Resource shares mixed
Crude-oil prices, which rose during Asian trading hours, helped lift Japan Petroleum Exploration Co. /zigman2/quotes/201212147/delayed JP:1662 -1.14% /zigman2/quotes/202925532/delayed JPTXF -1.12% by 2.8%.
But a fourth session of losses for copper futures in New York on Wednesday dented the Australian mining sector, with BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP -0.78% /zigman2/quotes/208108397/composite BHP -0.45% down 2.2% and rival Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO -0.46% /zigman2/quotes/202627887/composite RIO +0.79% down 2.3%.
Commodity-exposed firms were also weak in Hong Kong, with Jiangxi Copper Co. /zigman2/quotes/201668148/delayed HK:358 -1.24% /zigman2/quotes/204256025/delayed JIXAY -2.94% down 2.1%, and Aluminum Corp. of China Ltd. /zigman2/quotes/202960704/delayed HK:2600 +0.44% /zigman2/quotes/208051344/composite ACH +1.23% down 2.8%.
Resource-focused conglomerate Citic Pacific Ltd. /zigman2/quotes/205176597/delayed HK:267 -2.52% /zigman2/quotes/208232395/delayed CTPCF -2.29% fell 2.3%, while Zijin Mining Group Co. /zigman2/quotes/204517000/delayed HK:2899 +1.31% /zigman2/quotes/209836076/delayed ZIJMF +4.95% fell 3%.
China’s central bank said Wednesday in its quarterly monetary-policy report that the country still faces the risk of slower growth and higher inflation and that inflation expectations are “unstable currently.”
“The [People’s Bank of China] report that came out overnight should be taken very, very seriously. China is seriously worried about inflation and there is a risk there that it will raise interest rates,” said Sullivan.
“The fact that they say they are going to maintain prudent policy, they are going to maintain tight monitoring of local-government debt — that’s going to be negative for the banks,” he said.
Banks trading lower in Hong Kong on Thursday included Bank of China Ltd. /zigman2/quotes/204682472/delayed HK:3988 -0.93% /zigman2/quotes/200548463/delayed BACHF -1.19% , down 1.5%; and HSBC Holdings PLC /zigman2/quotes/202687335/delayed HK:5 -0.26% , /zigman2/quotes/203901799/delayed UK:HSBA +0.45% lower by 0.6%.
Moody’s Investors Service said Wednesday it was placing over 100 financial firms across the world on ratings review due to the euro-zone crisis and other issues.
The global capital markets “are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions,” Moody’s said. See report on Moody’s bank reviews.
Earnings were also hitting the Australian banking sector, with retail banking giant Westpac Banking Corp. /zigman2/quotes/203084975/delayed AU:WBC +0.47% /zigman2/quotes/210300378/delayed WEBNF +0.48% down 3.5% after posting a drop in first-quarter net profit.
Diversified financial firm AMP Ltd. /zigman2/quotes/206014407/delayed AU:AMP +0.49% /zigman2/quotes/206400018/delayed AMLTF -0.84% fell 2.3% after reporting a lower fiscal-year profit of its own. See story on Australian stocks