Wednesday, November 2, 2011

Asia stocks down as Greek vote plan rocks markets

A currency trader reacts at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, Wednesday, Nov. 2, 2011. A wave of selling swept across Wall Street and stock markets around the world Tuesday after Greece's prime minister said he would call a national vote on an unpopular European plan to rescue that nation's economy. (AP Photo/Lee Jin-man)

A currency trader reacts at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, Wednesday, Nov. 2, 2011. A wave of selling swept across Wall Street and stock markets around the world Tuesday after Greece's prime minister said he would call a national vote on an unpopular European plan to rescue that nation's economy. (AP Photo/Lee Jin-man)

(AP) ? Asian stocks slumped for a third day Wednesday, as fears intensified that Greece might reject an austerity plan and default on its massive debts.

Japan's Nikkei 225 index tumbled 1.8 percent to 8,680.68. Hong Kong's Hang Seng dropped 1.1 percent to 19,163.93 and South Korea's Kospi index sank 1.1 percent to 1,888.53. Australia's S&P/ASX 200 index lost 0.5 percent to 4,210.40.

Benchmarks in mainland China, Taiwan, Indonesia and Malaysia also fell.

A wave of selling swept across global markets Tuesday, a day after Greece's prime minister said he would call a national vote on an unpopular European plan that would entail painful tax increases and drastic welfare cuts to slash the country's massive debts and prevent it from defaulting.

A top European official warned that Athens could be left to go bankrupt if it went through with the vote and experts said the broader deal ? which hopes to protect larger countries such as Italy from financial markets panic ? could collapse.

Ultimately, Greece could leave the euro currency union, causing massive financial havoc and pushing the global economy back into recession.

That prospect could be enough to keep the referendum from happening ? Papandreou's government could collapse before the proposal goes through, having lost huge amounts of support from its own party.

The Dow fell 2.5 percent to close at 11,657.96 on Tuesday. It was the biggest drop since Sept. 22. The S&P 500 lost 2.8 percent to 1,218.28. The Nasdaq composite dropped 2.9 percent to 2,606.96.

Japan's powerhouse export sector fell sharply, a day after data showed that U.S. manufacturing grew more slowly in October, hampered by weak demand for exports.

Mazda Motor Corp. tumbled 4.8 percent, Panasonic Corp. lost 3.8 percent and Sharp Corp. fell 3.5 percent.

Japanese utility Tokyo Electric Power Co. fell 3.9 percent after saying there may be signs of fresh nuclear fission in the No. 2 reactor at its disaster-damaged Fukushima Daiichi power plant, Kyodo News Agency said.

Benchmark crude for December delivery was down 84 cents at $91.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1 to settle at $92.19 in New York on Tuesday.

In currency trading, the euro fell to $1.3710 from $1.3715 late Tuesday in New York. At one point the euro fell to $1.3607, its lowest point since Oct. 12. The euro is down nearly 4 percent after hitting a seven-week high Thursday, when the European financial rescue plan was announced.

The dollar slipped to 78.15 yen from 78.33 yen.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2011-11-02-World-Markets/id-ab8c67c8bde041c08cafcf1fd6b6f920

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