RadioBDC Logo
Wake Up | Arcade Fire Listen Live
THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Asia stocks drop as Italy debt woes brew

A currency trader works near the screen showing the Korea Composite Stock Price Index, center, and currency exchange rate, right, at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, Monday, Nov. 14, 2011. Asian stocks rose sharply Monday after Japan's economy grew for the first time in four quarters and Europe moved closer to resolving a debt crisis that threatens to hurl the region into recession. A currency trader works near the screen showing the Korea Composite Stock Price Index, center, and currency exchange rate, right, at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, Monday, Nov. 14, 2011. Asian stocks rose sharply Monday after Japan's economy grew for the first time in four quarters and Europe moved closer to resolving a debt crisis that threatens to hurl the region into recession. (AP Photo/Lee Jin-man)
By Pamela Sampson
AP Business Writer / November 13, 2011

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

Your article has been sent.

Text size +

BANGKOK—Asian stocks fell early Tuesday, as lingering concerns about Italy's ability to repay its massive debts shook investor sentiment.

Japan's Nikkei 225 index lost 0.4 percent to 8,567.61. South Korea's Kospi index fell 0.4 percent to 1,895.44. Hong Kong's Hang Seng index fell 0.6 percent to 19,400.24.

Major indexes closed higher last week as Greece and Italy moved to form new governments and took other decisive steps to get their debt troubles under control. News that the two new leaders, Mario Monti in Italy and Lucas Papademos in Greece, would take control helped boost sentiment late last week.

But investors are realizing that the new governments may have a hard time reducing debt at a time when growth in both countries is stagnant.

An additional worrisome sign emerged Monday when the Italian government sold five-year bonds at their highest interest rate since 1997. That's a sign investors are still concerned about Italy's ability to repay its debts. And Italy's biggest bank, Unicredit, reported a $14.4 billion loss.

"So far it seems investors will remain cautious until Italy's technocratic government successfully implements some of the measures required to insulate its economy from the region's debt crisis," Stan Shamu of IG Markets in Melbourne said in a report.

Stocks tanked last Wednesday after key Italian borrowing rates jumped above 7 percent, a level widely seen as unsustainable.

In New York on Monday, the Dow fell 0.6 percent to close at 12,078.98. The Standard & Poor's 500 index fell 1 percent to 1,251.79. The Nasdaq composite index fell 0.8 percent to 2,657.22.