Asia stocks down as worries over Greece grow

Associated Press + More

By PAMELA SAMPSON, Associated Press

BANGKOK (AP) — Reports that Greece is considering preparations to leave the euro common currency sent Asian stock markets lower Wednesday.

Investors have long known of the possibility of a Greek withdrawal from the 17-nation euro currency union as it struggles to meet harsh austerity targets that are a condition of getting international bailout money.

But a financial news service's report, which quoted former Greek Prime Minister Lucas Papademos and suggested such a euro exit could be approaching, flustered markets.

Japan's Nikkei 225 index fell 1.2 percent to 8,623.46. The Bank of Japan on Wednesday left its key interest rate unchanged at near zero as widely expected.

Later Wednesday, leaders of the 27 European Union countries will meet in Brussels for a summit expected to focus on ways to kick start the region's faltering economy. A failure to make headway risks jolting markets further, analysts said.

"Unless there are dramatic developments at today's summit risk assets are set to continue to remain under pressure," analysts at Credit Agricole CIB in Hong Kong said in an email.

Hong Kong's Hang Seng fell 1.4 percent to 18,773.87 and South Korea's Kospi lost 1.3 percent at 1,806.39. Australia's S&P/ASX 200 lost 1.1. percent to 4,077.10.

U.S. stocks traded higher Tuesday until near the close, when Dow Jones Newswires reported that Papademos said preparations for Greece drop the euro are being considered.

A 50-point gain in the Dow Jones industrial average turned into a 57-point loss in 45 minutes. The Dow ended the day down marginally to 12,502.81. The Standard & Poor's 500 rose less than 1 point to 1,316.63. The Nasdaq composite index fell 0.3 percent to 2,839.08.

Benchmark oil for July delivery was down 50 cents to $91.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.01 to settle at $91.85 in New York on Tuesday.

In currencies, the euro fell to $1.2669 from $1.2756 late Tuesday in New York. The dollar fell to 79.84 yen from 79.92 yen.

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