Russia: Economic and security challenges    The US elections: Domestic concerns first    Egypt's Sisi approves amendments to VAT law; taxes to rise on tobacco products    Syrian troops press ahead with campaign as strikes kill 16    Don't miss Tchaikovsky's Swan Lake ballet concerts at the opera house    Solitude II    Hossam Dirar's "Daydreams" exhibition at Zamalek Art gallery is a must go    Egypt's former longtime president Mubarak dies; three-day mourning announced    Coronavirus heightens Iran's isolation, tests South Korea and Italy    Egypt declares three days of public mourning for former president Mubarak    Egyptian presidency, military mourn Mubarak as 'war hero'    We have to suffer against Bayern Munich, says Chelsea coach Lampard    BREAKING: Egypt's former president Hosni Mubarak dies at 91    Netanyahu says will press ahead with E-1 settlement project in West Bank    Mahathir strengthens power amid Malaysian political turmoil    Pharaonic Petroleum to pump $277 investments in FY20/21    China stocks cap fall on limited domestic impact    Liverpool's record-equalling run 'incredible': Klopp    PSG's Thiago Silva, Ander Herrera out injured for weeks    Egypt's non-petroleum exports increase 4% YoY in January    Kuwait reports three new cases of coronavirus, raising total to eight    China says to strengthen joint coronavirus response with S.Korea, Japan    Al-Sarraj says Libya witnesses a proxy war    No coordination with ministry of information: SCMR head    Ministry of Endowment bans Abdullah Roshdy after controversial statements    Health Ministry launches new family planning campaign for after birth care    Egyptian Space Agency to open first satellite assembly centre March 2021    Parliament amends prison law to offer rehabilitation for convicts    PM, GAFI CEO discuss assisting free zones' financially distressed companies    Suez Canal Bank's profit reach EGP 542.2m by end of 2019    First art exhibition taking place in Saudi Arabia features connection between Fellini and Picasso    Cairo Opera House hosts first hologram concert for legendary Umm Kulthum    Al-Mashat in US to prepare for Egypt's participation in IMF Spring Meetings    Al-Sisi receives high-level African judges    Al-Sisi meets intelligence chiefs participating in Cairo's Arab Intelligence Forum    Cannes to commemorate Wong Kar-wai's In the Mood for Love    Earthquake hits Turkey-Iran border kills nine, injures more than 100    Al Ahly, Zamalek play 2nd Cairo Derby in less than 96 hours    Amr Fahmy former CAF general-secretary, dies battling cancer    Iran raises death toll from coronavirus to 8, infections to 43    Italy coronavirus cases increase to more than 100    Cairo court acquits Mubarak's sons of stock market manipulation    Al Ahly play Zamalek for Egypt Super Cup in Abu Dhabi    Little Women on its way to become a classic    UEFA Champions League: defending champions Liverpool clash with Atletico Madrid    Chinese Grand Prix likely to be called off amid coronavirus concerns    Egypt's Golden Age actress, Nadia Lutfi, dies at 83    Egypt's President Sisi pardons some prisoners on 25 Jan. Revolution anniversary    

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Asia Shares Dive As Greek Political Concerns Deepen
Published in Amwal Al Ghad on 16 - 05 - 2012

Asian shares tumbled in a broad-based sell-off Wednesday as investors reacted to news that Greece's political impasse would force new elections in the country by dumping equities, with Hong Kong and South Korean shares taking the biggest hit.
The Greek news overcame relatively positive U.S. economic data to send the Dow Jones Industrial Average DJIA -0.50% to near a four-month low overnight, offering a negative lead for the Asia markets.
“Investors are thinking: We don't know what's going to happen with Greece, we don't know what's going to happen with Europe, we're just going to sit it out," said Andrew Sullivan at Piper Jaffray.
Sullivan added that trading volumes were up, “which would indicate some investors are just throwing the towel in."
Amid concerns that elections in Greece will ultimately lead to the country leaving the euro zone, Sullivan said: “It's just imponderable as to how you play Greece coming out of the euro zone. ... It's very difficult to know how to play that in Asia. Investors can't get an inside line on this — there's no precedent."
Hong Kong's Hang Seng Index (HK:HIS) -3.19% was among the region's worst performers Wednesday, plunging 3.2%, with Sullivan citing the Hong Kong market's relatively high liquidity as making it easy to sell out of. The drop marked the index's worst percentage decline since Nov. 10, when it sank 5.2%, Market Watch reported.
Also suffering a loss in excess of 3%, South Korea's Kospi (KR:SEU) -3.08% fell 3.1%.
Australia's S&P/ASX 200 (AU:XJO) -2.36% wasn't far behind with a 2.4% drop, as a sharp fall in commodity prices sent major mining names lower.
Japan's Nikkei Stock Average (JP:100000018) -1.12% dropped 1.1%, China's Shanghai Composite Index (CN:000001) -1.21% lost 1.2%, Taiwan's Taiex (XX:Y9999) -2.18% gave up 2.2% and India's Sensex (IN:1) -1.92% was down 1.9% in afternoon trading.
Tony Brennan, Citigroup head of Australia and New Zealand investment strategy, said Wednesday that the most likely case now involves Greece leaving the euro within the next 18 months. However, “policy action in Europe will help limit the fallout," he said.
Barclays Capital analysts were more pessimistic about potential support measures, at least for the short term.
“To arrest market fears, proactive measures are needed. Unfortunately, they seem nowhere in sight. This suggests that risky assets are likely to trade erratically at best, with a bias to underperform."
Among the riskier assets are cyclical shares closely tied to global growth, such as miners, and the Greek news hit Australian-listed miners especially hard Wednesday.
BHP Billiton Ltd. (AU:BHP) -4.05% BHP -2.51% and Rio Tinto Ltd.(AU:RIO) -3.85% RIO -4.22% — the Australian mining sector's two largest players — tumbled 4.1% and 3.9%, respectively. Uranium-focused miner Paladin Energy Ltd. (AU:PDN) -9.34% PALAF -8.69% dropped 9.3%.
Commodity players were also trading with sharp losses in Hong Kong, with Aluminum Corp. of China Ltd. (HK:2600) -3.30% ACH -1.81% down 3.3%, PetroChina Ltd. (HK:857) -3.80% PTR +1.65% lower by 3.8%, and China Coal Energy Co. (HK:1898) -6.90% CCOZF +3.60%dropping 6.9%.
Banks likewise suffered in Hong Kong, with Bank of Communications Co. (HK:3328) -3.85% BKFCF -14.38% down 3.9%, and China Citic Bank Corp. (HK:998) -5.37% CHBJF -10.16% diving 5.4%.
However, the largest Japanese banks initially offered some support in Tokyo after the top three lenders all posted solid profits, managing to sidestep the euro-zone crisis.
Mizuho Financial Group Inc. (JP:8411) +1.75% MFG +0.70% managed to hold on to some of its early gains in the afternoon, rising 1.8%, while Sumitomo Mitsui Financial Group Inc.(JP:8316) -0.34% SMFG -0.68% fell into negative territory but outperformed the market with a 0.3% decline.
Early advances for Mitsubishi UFJ Financial Group Inc. (JP:8306) -1.43% MTU -0.46% vaporized, with the bank's shares dropping 1.4%.
Major Japanese exporters dragged on the Tokyo market as the European uncertainty outweighed a weaker yen, with the U.S. currency USDJPY +0.16% climbing back above the ¥80 level.
Among the decliners in Tokyo, Renesas Electronics Corp. (JP:6723) -3.48% RNECY -12.45% retreated 3.5%, Toyota Motor Corp. (JP:7203) -2.05% TM -1.76% gave up 2.1%, Fujitsu Ltd. (JP:6702) -2.92% FJTSY +1.71% fell 2.9%, and Bridgestone Corp. (JP:5108) -2.00% BRDCF -0.86% lost 2%.
In Hong Kong, Europe-exposed apparel firm Esprit Holdings Ltd. (HK:330) -5.54% ESHDF -14.93% fell 5.5%, while Chinese computer major Lenovo Group Ltd. (HK:992) -4.53% LNVGF -0.50% dropped 4.5%.
Back in Australia, logistics firm Toll Holdings Ltd. (AU:TOL) -15.23% THKUF -1.06% plunged 15.2% after warning on its underlying earnings for the current fiscal year.

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