Investors in Asia continued to sell off risky assets like stocks on Monday, as Europe’s prolonged debt crisis and the possibility of a global recession caused investors to flee riskier assets like stocks.
Japan’s Nikkei 225 index fell 1.7 per cent to 8,419.36. A stubbornly strong yen weighed on the country’s export sector, making products more expensive overseas. Consumer electronics giants Panasonic Corp. fell 3.8 per cent and Sharp Corp. lost 3.6 percent. Isuzu Motors Ltd. tumbled 4.7 per cent.
South Korea’s Kospi index was 0.2 per cent lower at 1,692.69. Hong Kong’s Hang Seng index fell 0.3 per cent to 17,625.15. Bucking the trend was Australia’s S&P ASX index, up 0.5 per cent to 3,921.10.
On Wall Street on Friday, the Dow Jones industrial average rose slightly but closed the week down 6.4 per cent, its worst showing since the depths of the financial crisis three years ago.
Meanwhile, fears about Europe’s debt increased early Friday on news that Moody’s Investors Service had downgraded its ratings of eight Greek banks by two notches.
Investors have been waiting in vain for news that Greece will receive the next instalment of a bailout package in time to avoid defaulting on its debt next month. If it defaults, banks throughout Europe are likely to lose the money they invested in Greek bonds and investors fear that could ultimately lead to a recession in Europe and the U.S.
Finance ministers from 20 large countries pledged Friday to take “all necessary actions to preserve the stability of the banking systems and financial markets.” But they offered nothing specific.
In currencies, the euro fell to $1.3427 from $1.3467 late Friday in New York. The dollar fell to 76.40 yen from 76.72 Japanese yen.
Benchmark oil for November delivery was down 2 cents to $79.83 per barrel on the New York Mercantile Exchange. The contract fell 66 cents to finish at $79.85 per barrel on the Nymex on Friday.
