Asian markets suffer as EUROZONE crisis deepens

Asian markets mostly fell Friday and the euro sat at near-two year lows as weak European data added to pessimism after this week’s disappointing summit on saving Greece from leaving the euro zone. Positive leads from Wall Street
and European markets were unable to provide a lift as Asian indexes gave up the gains made since the start of the year.

Tokyo was flat by the break, Hong Kong was 0.35 per cent lower while Shanghai was off 0.15 per cent and Sydney eased 0.41 per cent but Seoul gained 0.36 per cent. As traders digested the outcome of Wednesday’s summit in Brussels
— which laid bare the divisions between Germany and France rather than solve Athens ‘problems — a string of data highlighted the woeful state of Europe’s economy.

The latest surveys of euro zone business confidence showed the worst monthly fall in May for nearly three years, to 45.9 points on the Markit PMI index from 46.7 in April. Anything less than 50 signals a slowdown. In Germany, the
backbone of Europe’s economic might, business confidence fell to a six-month low while a French leading index for manufacturing activity fell to the lowest level for 37 months.

And in non-euro member Britain, data showed that the recession was deeper than previously thought, with the economy shrinking 0.3 per cent between January and March, worse than the prior estimate for a 0.2-per cent contraction.
The euro bought $1.2540 and 99.87 yen in early Asian trade, compared with $1.2532 and 99.74 yen in New York late Thursday. The common currency sank to $1.2516 in New York, its lowest since July 2010.

The dollar was trading at 79.65 yen against 79.59 yen. Global investors are increasingly concerned that Greece will end up exiting the euro as a June 17 election is expected to see a win for anti-austerity parties who have said
they will tear up a bailout deal signed with the EU and International Monetary Fund.

The talks on Wednesday ended with German Chancellor Angela Merkel facing down calls for jointly pooled euro zone debt, or Eurobonds, from a growing number of her peers, led by newly-elected French President Francois Hollande.

Short URL: https://www.newspakistan.pk/?p=23396

Posted by Hamza Jahangir on May 25 2012. Filed under Latest News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry