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Asia stocks weighed down by Europe debt woes

Thursday - 3/28/2013, 2:08am  ET

PAMELA SAMPSON
AP Business Writer

BANGKOK (AP) -- Renewed jitters about the debt crisis in Europe sent Asian stock markets lower Thursday.

Banks in Cyprus are due to open later Thursday -- for limited banking only -- after being shut for nearly two weeks as an emergency loan was being pieced together to prevent the nation's financial sector from collapsing.

The agreement reached late Monday with international lenders gives Cyprus a 10 billion euro ($12.9 billion) bailout but slaps penalties on depositors holding more than 100,000 euros in the country's two largest banks. Investors are waiting in the wings to see if the agreement holds.

Evan Lucas of IG Markets in Melbourne said the deal has sparked fears it may be repeated in other European nations that are in similar circumstances. In an email commentary, he said investors saw the deal "as a monster in the shadows for banks in Portugal, Spain and Italy" since it requires depositors -- not the public or its tax contributions -- to take the pain.

Japan's Nikkei 225 index tumbled 1.6 percent to 12,298.61. Hong Kong's Hang Seng lost 1.1 percent to 22,207.87. South Korea's Kospi slipped 0.2 percent at 1,990.61. Australia's S&P/ASX 200 lost 0.3 percent to 4,978.50.

Meanwhile, in Italy, a leading political party failed in its attempt to form a new government. The stalemate has raised concerns that the country will be unable to manage its deep debts. Italy is the third-largest economy of the 17 countries that use the euro.

Wall Street stocks closed mostly lower Wednesday on Europe worries. The Dow Jones industrial average dropped 0.2 percent to close at 14,526.16. The S&P 500 fell less than 0.1 percent to close at 1,562.85. The Nasdaq composite index rose 0.1 percent to 3,256.52.

Benchmark oil for May delivery was up 17 cents to $96.75 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 24 cents to close at a five-week high of $96.68 per barrel on the Nymex on Wednesday.

In currencies, the euro rose to $1.2788 from $1.2774 late Wednesday in New York. The dollar fell to 94.05 yen from 94.38 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson


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