Spanish bond auction response sees Asian stocks decline
Asian stock markets fell today after a weak Spanish bond auction inflamed concerns about the European debt crisis and hopes faded for more help for the US economy from the Federal Reserve.
Japan's Nikkei 225 index fell 1% to 9,717.93, after hitting its lowest intra-day point since March 8 at 9,692.70.
Hong Kong's Hang Seng tumbled 1.5% to 20,489.01 and South Korea's Kospi fell 0.8% to 2,002.69. Falling commodity prices dragged Australia's S&P/ASX 200 down 0.9% to 4,296.80.
The debt crisis in Europe flared anew yesterday after a disappointing auction of government debt in Spain signalled investor confidence in the country's finances is weakening.
The Dow Jones industrial average lost 125 points, and the price of gold plunged to its lowest level since January.
That compounded worries that arose on Tuesday, when minutes released from the March meeting of the US Federal Reserve's Open Market Committee gave no hint of a third round of bond purchases, dubbed quantitative easing III or QE3, to support the US economy.
The Fed has already carried out two rounds of bond-buying, most recently in August 2010, to drive down long-term interest rates.
Low bond yields generally encourage investors to shift money to buying stocks.
