Asia stocks struggle on Italy fears
Asian stock markets struggled to advance today as worries intensified that Italy could become the next domino to fall in Europe’s debt crisis.
Japan’s Nikkei 225 index fell 0.2% to 8,751.86, South Korea’s Kospi was 0.3% lower at 1,914.33 while Hong Kong’s Hang Seng rose 0.6% to 19,787.10. Australia’s S&P/ASX 200 was 0.4% higher at 4,290.30.
Benchmarks in Singapore, Malaysia and Indonesia were higher. Shares in mainland China were mixed and Taiwan’s benchmark was down.
Wall Street finished higher on Monday on news that Greece would receive the latest instalment of emergency aid as long as the country’s two main parties commit to implementing economic reforms agreed to by the country’s previous government.
The Dow rose 0.7% to close at 12,068.39, the Standard & Poor’s 500 index rose 0.6% to 1,261.12, and the Nasdaq rose 0.3% to 2,695.25.
As Greece’s economy remained on life support, worries began to surface about Italy, where the prospect of financial disaster is real because of Rome’s huge debts and slow growth.
Unlike Ireland, Greece and Portugal – the three countries that Europe has already bailed out – Italy’s economy could be too large to rescue.
Soaring borrowing rates in the past week have intensified pressure on premier Silvio Berlusconi to resign.
Investors want the government to quickly pass measures to boost growth and cut debt, but defections from Mr Berlusconi’s coalition government mean he no longer commands enough loyalty to pass the reforms.
