TOKYO — Asian shares and commodities pulled back yesterday on uncertainty over the United States fiscal row and the euro zone debt crisis, where global lenders stopped short of giving further aid to debt-stricken Greece.
Report by Reuters
A 0,6% easing in US stock futures point to a weak Wall Street open and expectations that European shares will slip, with financial spreadbetters predicting London’s FTSE 100 FTSE,
Paris’s CAC-40 FCHI and Frankfurt’s DAX GDAXI will open down 0,4%L EU N.
The euro dropped 0,3% to a two-month low of $1,2673, which hoisted the dollar index to a two-month high of 81,20 DXY.
MSCI’s broadest index of Asia-Pacific shares outside Japan MIAPJ0000PUS fell 1% to a seven-week low in a decline led by growth-sensitive energy MIAPJEN00PUS and materials MIAPJMT00PUS sectors.
Worries about weak global demand, underscored on Monday by data showing Japan’s economy shrank and the firmer dollar weighed on commodities prices and some regional share indexes such as resource-rich Australia AXJO which fell 1,5% to a seven-week low.
Japan’s Nikkei average N225 gave up early gains to end down 0,2% at a four-week low, a seventh straight session of decline.
“Investors can’t assess the extent of the impact from the fiscal cliff and it could be months before the issue is settled, so this uncertainty is keeping investors guarded,” said Yuuki Sakurai, chief executive of Fukoku Capital Management.
“This, along with Europe continuing to muddle through its fiscal problems, is putting downside pressure on markets.”
US lawmakers return to the capital yesterday. Analysts say a failure to act on a scheduled $600 billion in tax increases and government spending cuts due early next year could tip the US back into a recession.
Greece’s international lenders agreed on Monday to give Athens twomore years to meet budget targets, but euro zone Finance ministers did not disburse more aid. Euro zone Finance ministers will meet again on November 20 to discuss Greece.
Sakurai said market caution over the leadership transition in China this week is offsetting more bullish sentiment from recent data suggesting a pick up in the economy.
Investors want to see the political change completed without any problems and the shape of the new leaders’ policies, he said.
Onshore Chinese shares slid to their lowest since September 28 and weighed on Hong Kong stocks after State media reported that housing market curbs will remain. Hong Kong HSI shed 0,8% and Shanghai SSEC lost 1,3%.