HONG KONG: Asian markets eased Tuesday following losses on Wall Street fuelled by
weak US manufacturing data and fears over gridlock in Washington on agreeing a
plan to avert the fiscal cliff.
The euro remained well bought
after hitting a six-week high against the dollar in New York as Greece began a
debt-buyback programme and eurozone finance ministers nodded through a bailout
for Spain's troubled banks.
Tokyo fell 0.10 per cent, Hong
Kong was 0.15 per cent off, Sydney eased 0.29 per cent, Shanghai was 0.26 per
cent lower and Seoul lost 0.11 per cent.
US shares turned down on Monday
after the Institute for Supply Management said its index on manufacturing
activity for November showed contraction after two months of expansion.
The purchasing managers index
(PMI) fell to 49.5, below the 50 breakeven level, from 51.7 in October.
Businesses the ISM surveyed
blamed the slow global economy and uncertainty from the fiscal cliff battle in
Washington.
It followed positive
manufacturing numbers across Asia, while Europe also saw a marginal
improvement.
The Dow slid 0.46 per cent, the
S&P 500 fell 0.47 per cent and the Nasdaq shed 0.27 per cent.
US politicians have until the end
of the month to agree a deal on cutting the country's huge deficit and avoid
the fiscal cliff of huge tax hikes and spending cuts widely expected to tip the
economy into recession if they take effect.
However, there has been little
progress, with Republican and Democrats blaming each other for the stalemate.
On Monday the Republicans put
forward a proposal to the White House that calls for $800 billion in increased
tax revenue, half of what President Barack Obama has proposed, while it also
includes huge cuts to Medicare and other programmes. The plan was immediately
rejected.
In Europe Greece began its
programme to buy back privately held debt at a big discount, the underlying
condition for it to receive its next tranche of bailout funds from the European
Union and International Monetary Fund.
Eurozone finance ministers also
gave the green light to a 39.5 billion euros recapitalisation of Spain's banks
next week.
A preliminary plan for a bailout
for Cyprus worth 17 billion euros was also drawn up.
The euro changed hands at $1.3061
and 107.28 yen in early Asian trade, compared with $1.3051 and 107.36 yen in
New York late Monday. In New York, the European currency hit $1.3076, its
highest level in almost six weeks.
The dollar was slightly lower at
82.14 yen from 82.24 yen.
Oil prices eased, with New York's
main contract, light sweet crude for delivery in January, falling 18 cents to
$88.91 a barrel and Brent North Sea crude for January down 14 cents at $110.78.
Gold was at $1,712.80 at 0220 GMT
compared with $1,717.75 late Monday.
- AFP/ck
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