Asian stocks plunge as euro falls to 4-year low

The Canadian Press ~ The News
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SINGAPORE — Asian stock markets tumbled Monday while European equities were mixed after investor concern that the Europe debt crisis will worsen sent the euro to a 4-year low.

In early trading in Europe, Britain’s FTSE 100 rose 0.2 percent, Germany’s DAX index was little changed, and France’s CAC-40 slipped 0.7 percent.

Investors in Asia weren’t convinced last week’s $1 trillion bailout package will keep a sovereign debt crisis from spreading from Greece to other European countries. Chinese shares sank to a one-year low.

In an interview with German newspaper Der Spiegel to be published Monday, European Central Bank President Jean-Claude Trichet said Europe’s economy “is in its most difficult situation since World War II or perhaps even since World War I.”

“The market is concerned that the euro could trigger another financial crisis,” said Linus Yip, a strategist with First Shanghai Securities in Hong Kong. “I don’t think that’s likely, but that’s the fear out there.”

The euro fell to $1.2294 on Monday, the lowest since 2006, from $1.2352 on Friday.

Asian investors were concerned that cost-cutting fiscal measures being taken by Greece, Portugal and Spain could hamper a recovery in the eurozone economy and undermine export demand.

Japan’s benchmark Nikkei 225 stock average dropped 226.75 points, or 2.2 percent, to 10,235.76, while South Korea’s Kospi lost 2.6 percent to 1,651.51 and Australia’s S&P/ASX 200 index was down 3.1 percent at 4,467.20.

China’s benchmark index in Shanghai tumbled 5.1 percent to a one-year low amid investor concern the government will further tighten credit markets to slow economic growth.

Hong Kong’s Hang Seng index lost 2.1 percent, India slid 1.6 percent and Thailand sank 2.1 percent.

On Wall Street on Friday, the Dow Jones industrial average fell 162.79 points, or 1.5 percent, to 10,620.16.

In currencies, the dollar edged down to 92.10 yen in Tokyo from 92.30 yen in New York late Friday.

Benchmark crude for June delivery was down $1.64 to $69.97 a barrel in electronic trading on the New York Mercantile Exchange. The June contract lost $2.79, almost 4 percent, to settle at $71.61 on Friday.

Organizations: Der Spiegel, European Central Bank, First Shanghai Securities Dow Jones industrial average New York Mercantile Exchange

Geographic location: Europe, Greece, SINGAPORE Hong Kong Britain Germany France Asia Portugal Spain Japan South Korea Australia China Shanghai India Thailand Tokyo New York

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