Asian stock markets mostly fell on Wednesday after a meeting of European Finance Ministers failed to stem fears that the euro currency union is hurtling toward a breakup.
Japan’s Nikkei 225 index dropped 0.9 per cent to 8,406.04 and South Korea’s Kospi shed 0.1 per cent to 1,854.36. Hong Kong’s Hang Seng lost 0.7 per cent to 18,136.53. Australia’s S&P/ASX 200 rose 0.3 per cent to 4,112.20.
Japan’s industrial production rose 2.4 per cent in October from the previous month, the government said Wednesday. But the Ministry of Economy, Trade and Industry expects it to dip again in November and described industrial production as “flat”.
A meeting in Brussels of Finance Ministers from the 17 countries that use the euro ended without an announcement on plans to contain the debt crisis that is threatening to shatter the currency union.
The Ministers sent debt-riddled Greece €8 billion ($10.7 billion) to stem an immediate cash crisis, but they kicked more difficult issues such as whether countries should cede some control over their finances to a central European authority to the leaders of the European Union who meet next week.
In the latest sign of trouble, Italy was forced to pay a high interest rate on an auction of three-year debt on Tuesday. The 7.89 per cent rate was nearly three percentage points higher than last month, an enormous increase.
If Italy were to default on its debt of €1.9 trillion ($2.5 trillion), the fallout could spell ruin for the euro common currency and send shock waves through the global economy.
On Wall Street on Tuesday, a jump in U.S. consumer confidence sent stocks modestly higher. The Dow Jones industrial average rose 0.3 per cent to close at 11,555.63. The Standard & Poor’s 500 index rose 0.2 per cent to 1,195.19. The Nasdaq composite, which consists mostly of technology stocks, fell 0.5 per cent to 2,515.51.
The Conference Board, a private research firm, said its Consumer Confidence Index climbed 15 points in November to 56.0 an improvement, but still well below the level of 90 that indicates an economy on solid footing.
