Asia Roundup: Mixed after Italy downgrade

HONG KONG: Asian stock markets were mixed yesterday as the eurozone debt crisis deepened after ratings agency Standard & Poor's downgraded Italy's sovereign debt.

The move further depressed the already weak euro, which sent Tokyo shares tumbling, but a late bargain-hunting spree helped several regional indexes post small gains.

However, despite the late rise there are mounting concerns Athens is close to defaulting on its debt obligations as Greek and European leaders make very little progress on solving the country's financial woes, which analysts say could spread to other economies.

"The S&P downgrade itself is not a surprise, but the concern is whether Greek's sovereign debt crisis will spread to Italy and Spain," said Hiroichi Nishi, general manager at SMBC Nikko Securities.

Tokyo ended 1.61 per cent, or 142.92 points, lower at 8,721.24 and Sydney lost 1.01 per cent or 41.3 points, to close at 4,040.2.

However, Seoul added 0.94 per cent, or 17.03 points, to finish at 1,837.97 and Shanghai picked up 0.41 per cent, or 9.96 points, to 2,447.76.

Regional bourses opened soon after S&P said it had downgraded Italy's debt to "A/A-1" from "A+/A-1+", citing economic, fiscal and political weaknesses in the eurozone's third-largest economy.

It said Rome's weak governing coalition would "limit the government's ability to respond decisively" to events.

"We believe the reduced pace of Italy's economic activity to date will make the government's revised fiscal targets difficult to achieve," S&P said in a statement.

In other markets:

* Taipei edged up 0.16 per cent, or 11.97 points, to 7,492.85.

* Manila fell 2.05 per cent, or 88.17 points, to 4,219.82.

* Wellington ended flat, edging up 2.31 points to 3,290.62.

* Jakarta closed flat, edging down 2.94 points to 3,752.11.

* Bangkok edged up 0.89 per cent or 9.09 points to 1,026.28.

* In Mumbai Indian shares rose 2.11 per cent or 353.93 points to 17,099.28. - AFP