Asia stocks fall after Europe debt turmoil worsens
Reported by: UNBConnect
Reported on: Jun 14, 2012 10:22 am
Reported in: Business
Bangkok, June 14 (UNB/AP) — Asia stock markets fell Thursday, as ominous signs emerged that a debt crisis that has been roiling Greece and then Spain is about to erupt elsewhere on the continent. Investor sentiment was battered by developments Wednesday, when Italy’s borrowing costs rose and Cyprus said it may seek an emergency bailout this week. Yet another troubling sign came out of Spain, whose 10-year borrowing rate inched up to 6.71 percent from 6.67 percent. That is close to the 7 percent rate that led Greece, Portugal and Ireland to seek bailouts. Japan’s Nikkei 225 index fell 0.7 percent to 8,528.51. Hong Kong’s Hang Seng dropped 0.8 percent to 18,877.40 and South Korea’s Kospi was nearly flat at 1,858.73. Moody's, the credit ratings agency, downgraded Spain’s government debt three notches late Wednesday, placing it one level above junk status. It downgraded Cyprus’s debt by two, pushing it deeper into junk rating. Italy, meanwhile, had setbacks of its own. Its 10-year borrowing rate rose to 6.07 percent from 6.02 percent, and the interest rate on its one-year bonds also rose sharply. Greece will hold elections Sunday, and voters may endorse a party that wants to cancel the terms of Greece’s own bailout. That would almost certainly force Greece to leave the euro currency. ‘‘The Greek election will undoubtedly be seen as a landmark event in history, as it goes to the core of Greece’s continuation in the eurozone and the fate of the region itself,’’ Cameron Peacock of IG Markets in Melbourne said in a market commentary. The turmoil in Europe weighed Wall Street down on Wednesday. The Dow Jones industrial average fell 0.6 percent to 12,496.38. The Standard & Poor’s 500 fell 0.7 percent to 1,314.88. The Nasdaq composite index fell 0.9 percent to 2,818.61. Benchmark oil for July deliver was down 23 cents to $82.39 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 70 cents to finish at $82.62 per barrel on the Nymex on Wednesday. In currency trading, the euro fell to $1.2561 from $1.2589 late Wednesday in New York. The dollar rose to 79.42 yen from 79.33 yen.
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