Asia stocks drop on U.S. debt fears; Nikkei down 0.8%
Investing.com
Published Jul 25, 2011 02:52AM ET
During late Asian trade, Hong Kong's Hang Seng Index fell 0.85%, Australia’s ASX/200 Index sank 1.5%, while Japan’s Nikkei 225 Index retreated 0.81%.
With time running out, Democrats and Republicans from the U.S. Congress split into two camps and held talks among themselves over the weekend.
President Barack Obama said that he was "deeply disappointed" by the lack of progress towards reaching an agreement, while Senate Democratic leader Harry Reid said Republican "intransigence" was "pushing us to the brink of a default on the full faith and credit of the United States."
Shares in Japanese exporters performed poorly, amid the uncertain U.S. outlook. Consumer electronics giant Sony saw shares drop 2.2%, shares in Honda declined 1.55%, while Toyota shares slumped 1.35%.
Meanwhile, shares in Tokyo Electric Power Company fell 1.5% on a report that a compensation scheme for victims of the nuclear crisis at its stricken Fukushima plant may be enacted as early as next month.
In Hong Kong, shares in oil producers led losses after crude oil prices retreated, dampening earnings prospects for energy explorers.
Oil and gas giant PetroChina saw shares tumble 4%, China’s largest offshore oil producer CNOOC saw shares drop 2.1%, while shares in China Shenhua Energy sank 2.4%.
Hong Kong-listed shares of China Railway Construction and China Railway Group plunged 6.5% and 7% respectively after two high-speed trains collided in China on Saturday, killing at least 36 people.
The outlook for European stock markets was downbeat. The EURO STOXX 50 futures pointed to a loss of 0.9%, France’s CAC 40 futures slumped 0.8%, the FTSE 100 futures fell 0.7%, while Germany's DAX futures declined 0.85%.
Earlier in the day, ratings agency Moody's downgraded Greece by three notches to Ca from Caa1, after euro zone leaders announced a new aid package for Greece worth EUR159 billion on Thursday.
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Written By: Investing.com
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