Monday, May 28, 2012

Asia stocks choppy amid Spanish bank weakness

(AP) ? Asian stock markets were choppy Tuesday amid new worries about the health of Spanish banks and their potential to worsen Europe's debt crisis.

Concerns about Spain's banks have grown since Bankia, the country's fourth-largest lender, said Friday it needed ?19 billion ($23.8 billion) in state aid to shore itself up against bad loans ? largely from real estate gone sour. The bailout was far bigger than expected.

That magnified fears of a possible debt implosion in Europe's weaker economies ? starting with Greece, which will run out of money in the coming days without an emergency loan.

Japan's Nikkei 225 index fell 0.4 percent to 8,562.86 and benchmarks in Singapore and Indonesia also fell.

Hong Kong's Hang Seng rose slightly to 18,818.24 amid expectations that Chinese authorities will take steps to boost sluggish growth in the world's No. 2 economy. South Korea's Kospi added 0.6 percent to 1,834.24 after being closed Monday for a public holiday.

Sentiment has been driven so low by the latest developments that not even the possibility that Greece might resolve its political turmoil helped.

Recent polls suggested an upcoming election in Greece might result in a government willing to stick to a highly unpopular austerity program. Sticking to its austerity commitments will enable Greece to qualify for an urgently needed international bailout to avoid defaulting on its massive debts and remain in the euro currency union.

"A renewed sell off in Spanish debt as banking sector concerns intensify dented any positive impact from weekend polls in Greece showing more support for pro bailout parties," Credit Agricole CIB in Hong Kong said in an email.

Later Tuesday, Wall Street will reopen after a three-day Memorial Day holiday. Traders will also digest monthly data on German inflation and U.S. consumer confidence.

Benchmark oil for July delivery was up 27 cents to $91.13 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 20 cents at $90.86 on Friday, the last day it settled in New York. Markets were closed in the U.S. on Monday for the Memorial Day holiday.

In currencies, the euro rose to $1.2533 from $1.2518 late Friday in New York. The dollar fell to 79.40 yen from 79.66 yen.

Associated Press

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