Weak economic signals steer Asia down
BANGKOK – A loss of momentum on Wall Street and worries over Europe's debt problems dampened investor enthusiasm and led Asian stock markets lower Monday.
Oil prices fell below $99 a barrel Monday in Asia as crude became more expensive for investors with other currencies amid a U.S. dollar rally.
Japan's Nikkei 225 index dropped 0.6 percent to 9,587.85 with banking shares incurring losses following comments last week by Chief Cabinet Secretary Yukio Edano suggesting that Tokyo Electric Power Co. will need help repaying its debts. Mitsubishi UFJ Financial Group Inc. lost 1 percent. Mizuho Financial Group lost 0.8 percent.
Edano said Friday that TEPCO may need adjustments to its loans to help it cope with financial losses incurred following twin natural disasters on March 11 — an earthquake and subsequent tsunami that smashed into one of the company's nuclear plants in northeastern Japan.
The utility has been struggling for two months to bring a radiation leak from the crippled Fukushima Dai-ichi plant under control. TEPCO has sought a 2 trillion yen ($24.8 billion) loan to tide it through the initial emergency period.
It also expects to pay 50 billion yen ($620 million) in initial compensation to nearly 80,000 residents evacuated from around the plant. Overall damages are expected to be much higher.
South Korea's Kospi lost 0.5 percent to 2,108.45, and Hong Kong's Hang Seng was down 1.1 percent to 23,024.82. Benchmarks in Australia, Singapore and Taiwan were also lower.
Analysts said investors were worried about Greece's debt crisis and the absence of an energetic global economic recovery.
On Wall Street, stocks finished lower "as investors continued to worry about slowing global growth and European debt concerns," said Ben Potter of IG Markets in Melbourne.
After sailing through its best first quarter since 1998, U.S. stock markets are starting to lose some momentum. The Standard and Poor's 500 stock index, a broad market benchmark, is up just 1 percent this quarter after jumping 5.4 percent in the first three months of the year, in large part because of conflicting data about the health of the U.S. economy.
Meanwhile, industrials, a group that investors buy more when they expect an economic pickup to lead to new buildings or machines, are flat for the quarter. Energy companies are down 6.9 percent this quarter because several reports have indicated demand for oil is falling as gas nears $4 a gallon.
Benchmark crude for June delivery was down 84 cents to $98.81 a barrel in electronic trading on the New York Mercantile Exchange. The contract settled at $99.65 per barrel Friday, up 68 cents.
In currencies, the dollar rose against the euro to $1.4096 from $1.4110 in late afternoon trading Friday in New York. The dollar strengthened to 80.99 yen from 80.84 yen.