AFP/Tokyo
Asian markets fell yesterday on lingering eurozone debt fears and following losses on Wall Street as the Federal Reserve warned that the US economy was still weak. Traders nervously awaited a weekend summit of European Union leaders, amid concerns that a plan to tackle the region’s fiscal crisis would not be far-reaching enough. Tokyo closed 1.03%, or 90.39 points, lower at 8,682.15, Sydney fell 1.63%, or 68.8 points, to 4,144.9 and Seoul closed 2.74% down, or 50.83 points, at 1,805.09. Hong Kong closed 1.78%, or 326.12 points, down at 17,983.10 and Shanghai lost 1.94%, or 46.14 points, to 2,331.37. Many investors have stayed away from the markets, unsure about the future of the eurozone due to what they consider weak leadership. An announcement last week from France and Germany that they had a plan to address the debt problem sent global shares soaring. But traders have become cautious as details have been lacking and EU officials have given conflicting messages. A report by Britain’s Guardian newspaper saying France and Germany had agreed to more than quadruple the European Financial Stability Facility (EFSF) sent shares higher on Wednesday. But by the end of the day doubts set in again as reports emerged that any changes to the rescue fund were still being discussed. Adding to weak sentiment was news officials have decided against plans to convert the EFSF into a bond insurer. “Generally markets are still pretty nervous about Europe,” said CBA Institutional Equities head of sales Justin Rooney in Sydney. And Auckland-based HiFX senior trader Stuart Ive told Dow Jones Newswires of the summit: “Ultimately, I think the market is going to end up being pretty disappointed with whatever they put together. “They will come through with something but it’s not going to be what the market is looking for. It certainly won’t be a solution to the whole thing and we will get risk aversion coming back.” Adding to downside pressure was the Fed’s “Beige Book” September report on the world’s biggest economy, which said while there was still growth in all areas “many districts described the pace of growth as ‘modest’ or ‘slight’”. It said business contacts “generally noted weaker or less certain outlooks for business conditions”. Elsewhere in Asia, Taipei lost 1.48%, or 109.05 points, to end at 7,244.32; Singapore’s Straits Times Index closed down 0.96% to 2,694.01 points; Manila dipped 0.55%, or 22.98 points, to 4,170.57; Bangkok fell 3.10% or 29.09 points to close at 909.10; Indonesian shares fell 62.53 points or 1.70% to 3,622.78; Kuala Lumpur shares slipped 0.62%, or 9.07 points, to end at 1,441.18 and Wellington fell 0.31%, or 10.26 points, to 3,289.77.