Asian shares fall on Eurozone fears

TOKYO: Asian shares and the euro eased today as concerns about the
ability of euro zone countries to refinance their huge public debt
dampened investor risk appetite ahead of a French bond auction later in
the day.

The euro zone's sovereign funding plans and US
economic data, including US jobs figures due tomorrow are the primary
focus for market participants to gauge whether investors would take or
avert risk.

MSCI's broadest index of Asia Pacific shares
outside Japan fell 0.3 per cent after rising to its highest in nearly
a month on Wednesday.

Japan's Nikkei stock average opened down 0.5 per cent, after reaching a three-week high the day before.

US
stocks fared better than European peers, ending nearly flat on
yesterday after data showed new US factory goods orders rose solidly in
November while business capital spending oooled.

The
FTSEurofirst 300 index of top European shares closed down 0.63 per
cent, dragged down by bank shares after Italy's UniCredit SpA launched a
7.5 billion euro (US$9.68 billion) rights issue at a huge discount on
yesterday.

The terms reflected the difficulty some European
lenders are facing to raise capital to repair their weakened balance
sheet, and could discourage other lenders from tapping the market and
instead turn to further shrinking their assets, cut jobs or dividends.


"Europe still lacks a credible mechanism to rekindle growth,
and without growth the crisis can only intensify," said Russell Jones,
analyst at Westpac Bank.

The euro eased 0.1 per cent to around US$1.2930 today, nearing a 2011 low of around US$1.2856 hit on December 29.

A
break below that will take it back to levels not seen since September
2010. The euro stayed below 100 yen, not far above 98.71 yen hit on
Monday, its lowest since late 2000.

France plans to raise up
to 8 billion euros in long-term debt on Thursday but a key litmus test
for investor confidence is next week's debt sales by Spain and Italy,
the two countries most exposed to the crisis.

This follows
Wednesday's 10-year German Bunds auction, which drew a subdued demand
of bids amounting to 1.3 times the amount offered.

But the
result was a sharp improvement from a November sale which was one of
the country's least successful since the introduction of the euro and
raised fears the debt crisis was spreading to the euro zone's strongest
economy. - Reuters