Asia Roundup: Easier on Europe impasse

by **hlk** Tue 20 Sep 2011, 07:56

HONG KONG: Asian stocks and the euro fell yesterday after European finance heads failed to agree a plan to solve the region's debt woes, while they also put off a decision on releasing rescue funds to Greece.

The keenly watched meeting in Poland on Friday highlighted divisions between Europe and the US over the best way forward for the region, raising fears of another global financial crisis.

In Shanghai, the composite index lost 44.54 points, or 1.79 per cent, to 2,437.80, the lowest finish since July 2010.

"There's a lack of investor confidence recently," Li Lei, an analyst at Gold State Securities, told Dow Jones Newswires.

Sydney lost 1.64 per cent, or 67.9 points, to end at 4,081.5, while Seoul shed 1.04 per cent, or 19.15 points, to 1,820.95.

Tokyo was closed for a public holiday.

"With the next tranche of Greek bailout funding still no certainty the market is once again pondering the magnitude of a sovereign default on global markets," Ben Potter, a market strategist at IG Markets in Sydney, told Dow Jones Newswires.

Sony Kapoor, head of the Re-define think-tank, said "the otherwise fractious European Union leaders have united in their criticism of the markets, the IMF and now (US Treasury Secretary) Tim Geithner - for being honest about the scale of problems facing the eurozone".

Markets are growing concerned that Italy will follow Greece, Ireland and Portugal in calling for bailout funds to help cope with its huge debt burden.

Eyes are now on a two-day meeting this week of the US Federal Reserve's policy setting committee, which dealers hope will give a much-needed boost to sentiment with fresh monetary easing measures.

It "is very unlikely that this discussion ends with no action being taken", DBS Bank said in a market commentary.

In other markets:

* Taipei fell 1.27 per cent, or 96.52 points, to 7,480.88.

* Manila gained 0.42 per cent, or 17.82 points, to 4,307.99.

* Jakarta slipped 2.09 per cent, or 80.13 points, to 3,755.05.

* Bangkok closed 1.56 per cent, or 16.15 points, lower at 1,017.19.

* Mumbai slid 1.11 per cent, or 188.48 points, to 16,745.35, snapping three straight days of gains. - AFP