Asia Stocks Down Despite Deal To End Greek Crisis

Published February 21, 2012 5:27AM (EST)

BANGKOK (AP) — Asian stock markets fell Tuesday even as European leaders finally clinched a deal for a rescue package to prevent Greece from going belly up.

Benchmark oil hovered near $105 per barrel while the dollar fell against the euro but rose against the yen.

Japan's Nikkei 225 index was down 0.3 percent at 9,460. Hong Kong's Hang Seng fell 0.5 percent to 21,323.99 and South Korea's Kospi lost 0.5 percent to 2,014.38. Benchmarks in Taiwan, Singapore, mainland China and the Philippines also fell.

Australia's S&P/ASX 200 added 0.8 percent to 4,291.20. New Zealand and Indonesia also rose.

European leaders said they had agreed to a rescue package for Greece, which has been teetering on the brink of a major debt default. The rescue money had been delayed because lenders wanted the country to do more cost-cutting first.

Greece urgently needs the euro130 billion ($170 billion) package before it can move ahead with yet another deal to sharply reduce the amount of money Greece owes its private investors. Without the money, Greece will default on its debts, starting on March 20 when a bond repayment is due.

But the deal didn't make a dent on Asian markets. Many observers feel it falls far short of what Greece needs to prevent financial collapse.

On top of that: Europe does not have the will or the ability to spend the amount actually required to keep Athens afloat, analysts said.

"Greece is a hopeless case," said Francis Lun, managing director of Lyncean Holdings in Hong Kong. "I don't think you should throw good money after bad. It's a bottomless pit. It doesn't make sense."

In Tokyo, a waning yen failed to perk up many of Japan's big exporters, whose profits increase when the home currency weakens. Panasonic Corp. lost 2.2 percent, Sharp Corp. fell 2.3 percent and Nintendo Co. fell 2 percent.

Hong Kong-listed China Railway Construction Corp. rose 0.7 percent on news of China's decision to accelerate development in its western regions, including about 9,300 miles (15,000) kilometers of railways that will be opened by the end of 2015, the official Xinhua news agency reported Tuesday.

But oil refiners, airlines and shippers were hurt by rising oil prices. Hong Kong-listed China Petroleum and Chemical Corp., Asia's biggest oil refiner known as Sinopec, fell 1.9 percent. Japanese shipping company Mitsui O.S.K. Lines shed 0.8 percent. Korean Air Lines Co. plummeted 6.9 percent.

In Australia strong earnings reports helped set a positive tone. OneSteel, the country's second-biggest steel maker, jumped 12.3 percent after releasing a bullish forecast about growth from its mining interests.

U.S. markets were closed Monday for President's Day holiday. Traders will be looking for signs of economic recovery in the world's No. 1 economy on Wednesday, when the National Association of Realtors releases existing home sales for January.

Benchmark crude was up $1.47 to $104.71 a barrel in electronic trading on the New York Mercantile Exchange.

The euro jumped to $1.3270 from $1.3159 late Friday in New York. The dollar rose to 79.63 yen from 79.46 yen.

By Salon Staff

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