World stocks mixed amid Greek political impasse
Tuesday, 15 May 2012 | 14:30
World stocks were held in check Tuesday by a political impasse in Greece that could lead it to a destabilizing exit from the euro currency union.
Asian stocks closed mostly lower, but European shares got a lift after data showed Germany's economy grew 0.5 percent in the first quarter of 2012 due to strong exports.
That helped Britain's FTSE 100, which rose 0.2 percent to 5,475.11. Germany's DAX was marginally higher at 6,453.48 and France's CAC-40 added 0.3 percent to 3,067.79.
Wall Street was headed for a higher opening, with Dow Jones industrial futures rising 0.4 percent to 12,706 while S&P 500 futures added 0.5 percent to 1,340.20.
Japan's Nikkei 225 index fell 0.8 percent to 8,900.74, its lowest close since Feb. 3. South Korea's Kospi lost 0.8 percent to 1,898.96. Australia's S&P/ASX 200 lost 0.7 percent to 4,266.30.
Mainland Chinese shares extended their losses, with the Shanghai Composite Index hitting another three-month low, losing 0.2 percent to 2,374.90.
"The market remains unstable as investors are fretting over the economic outlook. The continued declines in the Europe and U.S. are also hurting," said Sun Chong, an analyst at Sinolink Securities, based in Shanghai.
State-owned oil and gas giant PetroChina fell 0.5 percent while Baoshan Iron & Steel, China's biggest steel maker, fell 1 percent.
But Hong Kong's Hang Seng, which some analysts said was oversold after more than a week of losses, rebounded 0.8 percent to 19,894.31.
"We witnessed some signs of stabilizing, the market is not falling sharply like the previous days," said Francis Lun, managing director of Lyncean Holdings in Hong Kong. "So I think we have a high chance of ending the eight-day loosing streak, but still the prospect for the market in May is still quite gloomy."
Greece has been unable to form a coalition government since voters gave support to political parties that want to cancel or renegotiate the terms of a massive financial bailout by international lenders that requires harsh austerity measures.
If Greece walks away from its debts, an exit from the euro currency would be likely, and the effects would ripple through the rest of Europe and its struggling economies. Some investors fear other weak euro countries could eventually take the same path.
"The eurozone debt crisis continues to dominate the headlines. The exit of Greece from the single currency has become probable. Not so long ago it was impossible," analysts at DBS Bank Ltd. in Singapore said in an email.
Japan's export sector was battered as the yen stayed strong against the euro and the dollar. Isuzu Motors Ltd. tumbled 3.5 percent. Yamaha Motor Co. lost 4.3 percent. Nintendo Co. lost 3.1 percent.
Australian resource shares slumped following a drop in commodity prices for industrial and precious metals. Energy Resources of Australia Ltd. plunged 5.3 percent. BHP Billiton, the world's largest mining company, fell 1.7 percent.
Benchmark oil for June delivery was down 33 cents to $94.45 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.35 to settle at $94.78 in New York on Friday.
In currencies, the euro fell to $1.2848 from $1.2847 late Monday in New York. The dollar rose to 79.92 yen from 79.86 yen.
Source: Associated Press