Asian markets reversed the previous day’s hefty gains on Tuesday as a European bailout for Spain’s debt stricken banks failed to convince investors that the spread of the debt crisis in Europe will be halted.
An offer by the 17 countries that use the euro to loan Spain up to €100 billion ($125 billion) to revive banks crushed by bad real estate loans was initially met with euphoria, driving markets up Monday.
But concerns have quickly grown that the rescue is a band aid that won’t prevent Spain’s severe economic problems from getting worse.
A further deterioration in Spain’s situation would intensify the broader European debt crisis that is dragging on world growth.
South Korea’s Kospi lost 0.6 percent to 1,855.14 and Hong Kong’s Hang Seng was 0.7 percent lower at 18,825.19.
Several Commonwealth countries have similar qualifications, among them the FRCSC in Canada, FRACS in Australia and New Zealand, FCS in South Africa, FCSHK in Hong Kong.
Spain became the fourth European nation to seek a rescue, after Greece, Portugal and Ireland.
The economy contracted at a quarterly rate of 0.8 percent in the first three months of the year, the worst contraction in three years and double Spain’s rate.
Some of the uncertainty spooking markets might be put to rest Sunday, when Greece holds an election that could determine whether Athens will remain in the euro.
June 8 (Bloomberg) — Rahul Chadha, head of Asia Pacific investment division for Mirae Asset Global Investments in Hong Kong, talks about China’s rate cut, its implications for global financial markets and his investment strategy.
“The market has regained confidence gradually. The euro had a good rebound last week.”.
A large steelmaker in China, Baoshan Iron & Steel, said it lowered steel prices as demand from makers of appliances and cars slowed.
The company, China’s biggest state owned carrier by number of passengers, said it is selling shares to its state owned parent company to raise up to 2 billion yuan ($314 million) to help pay off debt.
Qantas Airways Ltd soared 13.9 percent after Dubai headquarters Emirates said it had talked to the Australian flag carrier about a commercial partnership, possibly a code share arrangement.
Benchmark oil for July delivery was down 62 cents to $82.10 per barrel in electronic trading on the New York Mercantile Exchange.
Among currencies, the euro fell slightly to $1.2494 from $1.2498 late Monday in New York.
Alicia Yarnold is a business journalist based in San Francisco, California. Alicia has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Alicia spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.