Global growth fears keep Asia stocks in check

Associated Press
An investor looks at the stock price monitor at a private securities company Friday Sept. 21, 2012 in Shanghai, China. China's benchmark Shanghai Composite Index added 0.1 percent to 2,027.03 Friday, as Asian stock markets rebounded, led by oil and technology shares, despite uncertainty about the fragile global economy. (AP Photo)
.

View photo

An investor looks at the stock price monitor at a private securities company Friday Sept. 21, 2012 in Shanghai, China. China's benchmark Shanghai Composite Index added 0.1 percent to 2,027.03 Friday, as Asian stock markets rebounded, led by oil and technology shares, despite uncertainty about the fragile global economy. (AP Photo)

BANGKOK (AP) — Asian stock markets were held in check Tuesday by a host of concerns about the global economy.

Worries about the state of the world economy worsened after Germany's Ifo index of business confidence fell for a fifth consecutive month, evidence that even Europe's largest and so far strongest economy is being hurt by the region's debt crisis.

Stocks have risen in recent weeks as the U.S. Federal Reserve and monetary authorities in other major economies announced measures to support growth. The European Central Bank unveiled a new plan to restore investor confidence in the government finances of the 17 countries that use the euro. The most recent indicators, however, suggest the global economy is still slowing down.

"The near term outlook is likely to remain one of caution until some progress in the Eurozone is in evidence. However, growth concerns suggest any improvement in sentiment will be tenuous at best," analysts at Credit Agricole CIB in Hong Kong said in a market commentary.

Japan's Nikkei 225 index fell 0.2 percent to 9,048.55 after zigzagging earlier. The yen's strength weighed down shares.

Hong Kong's Hang Seng fell 0.1 percent to 20,669.16. South Korea's Kospi lost 0.6 percent to 1,992.30. Australia's S&P/ASX 200 shed 0.3 percent to 4,371.20. Benchmarks in mainland China, Taiwan and the Philippines fell. Singapore, Indonesia and Thailand rose.

Among individual stocks, Taiwan's Foxconn Technology Co. fell 2.1 percent. The company, which manufactures Apple's iPhones, resumed production at a factory in northern China that employs 79,000 people after unrest on Sunday.

Falling commodity prices due to worries about the global economy slammed mining shares. Australia's OZ Minerals Ltd. fell 3 percent. Mining giant Rio Tinto Ltd. slid 2 percent.

Gold prices slumped, taking related stocks with them. Hong Kong-listed Zijin Mining Group Co., China's largest gold miner, lost 1.6 percent.

Analysts say Europe's debt crisis will remain a key concern. Spain is due to unveil a new series of cost-cutting measures and structural reforms that could pave the way for a demand for financial aid from its fellow eurozone countries. Spanish stock and bond markets have been volatile in recent days as hopes that Madrid will apply for aid alternated with concern that it was delaying the move. Spain has been reluctant to ask since such assistance comes with strings attached.

"We still have a big overhang from Europe. The big question is whether Spain will ask for a bailout," said Andrew Sullivan, principal sales trader at Piper Jaffray in Hong Kong.

Wall Street closed lower Monday. The Dow Jones industrial average fell 0.2 percent to 13,558.92. The Standard & Poor's 500 index declined 0.2 percent to 1,459.89. The Nasdaq composite index dropped 0.6 percent to 3,160.78.

In currency markets, the euro rose slightly to $1.2937 from $1.2935 in late trading Monday while the dollar was slightly down at 77.80 yen from 77.86 yen.

Benchmark crude for November delivery was up 23 cents to $92.16 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 96 cents to settle at $91.93 on Monday.

View Comments (0)