Asian Markets Decline Sharply On Eurozone Worries

Asian markets are mostly trading sharply lower on Monday with investors pressing sales amid concerns about the European economy after rating agency Fitch put France on a negative outlook and issued fresh warnings about possible downgrade of several nations in the continent. A flat lead from Wall Street and lack of positive triggers from the region are also contributing to the slide.

With stocks across the board wilting under pressure, all the sectoral indices in the Australian Market are down in the red with fairly sharp losses. Energy, consumer discretionary and industrial stocks are among the worst hit in the sell-off. Mining, financial and healthcare stocks are also mostly down with sharp losses.

The benchmark S&P/ASX 200 index, which plunged to 4,064.8, is currently trading at 4,072, down 87.2 points or 2.1 percent from its previous close. The broader All Ordinaries index is down 91.8 points or 2.2 percent at 4,127, a few points off the day's low of 4,120.9.

Among bank stocks, ANZ Bank, Commonwealth Bank of Australia and National Australia Bank are down 1.5 to 1.7 percent, while Westpac is trading lower by about 2.3 percent. Bendigo & Adelaide Bank is down with a loss of 5 percent and Bank of Queensland is trading lower by 3.3 percent.

Bendigo and Adelaide Bank increased its capital raising venture to A$150 million due to strong demand from institutional investors. The bank had aimed to raise A$120 million through a placement of new shares to institutional shareholders, to fund its acquisition of Bank of Cyprus Australia.

Top miners BHP Billiton and Rio Tinto are down 2.3 percent and 2.5 percent, respectively. Fortescue Metals is losing about 3.5 percent and Newcrest Mining is down with a loss of 1.6 percent.

In the energy sector, Woodside Petroleum, Caltex Australia, Origin Energy and Oil Search are down 3 to 3.5 percent, while Santos is trading lower by 2.3 percent.

Billabong International shares plunged more than 40 percent after the company forecast a decline in earnings for the first half of the current financial year. The retailer expects its earnings before interest, tax, depreciation and amortization to be between A$70 million and A$75 million for the six months to December 31, 2011, down almost 26 percent from earnings in the prior corresponding period.

Onesteel is down nearly 10 percent. Seek, Harvey Norman Holdings, Myer Holdings, David Jones, Bluescope Steel, JB Hi-Fi, Paladin Energy, Alumina, Boart Longyear and UGL are all trading lower by 5 to 7 percent.

Goodman Fielder is down nearly 5 percent. Atlas Iron, Challenger, Downer EDI, WorleyParsons, Whitehaven Coal, QR National and AMP are also down sharply in the red.

According to the data released by the Australian Bureau of Statistics, merchandise imports rose A$56 million or 2.7 per cent in November, to A$20.813 billion, seasonally adjusted. Unadjusted, merchandise imports increased by 3 percent or A$720 million in November, the ABS said.

In the currency market, the Australian dollar opened higher and was quoting at US$0.9980 in early trades, up slightly from Friday's close of US$0.9970. At noon, the Aussie was trading at US$0.9943 to the U.S. dollar.

The Japanese market drifted lower amid fairly heavy selling in banking, precision instruments, mining and marine transport stocks. Automobile, pharmaceuticals and rubber stocks traded mixed in the morning session.

Besides worries about the financial crisis in Europe, the yen's strength also contributed to the decline in the Japanese market.

The benchmark Nikkei 225 index, which opened nearly 40 points down at 8,363, was down 70.7 points or 0.8 percent at 8,331 at the end of the morning session.

Sumitomo Osaka, down more than 9 percent, was the biggest loser in the Nikkei index. Olympus Corp shares lost more than 5.5 percent and Nitto Boseki was down by over 4 percent.

Nomura Holdings, Panasonic Corp, Mitsumi Electric, Nippon Electric Glass, Mitsui OSK Lines, Mitsubishi Chemicals, Kawasaki Kisen, Kobe Steel, Nippon Yusen, Pacific Metals and Toho Zinc were all down 2 to 4 percent.

Softbank, Nippon Sheet Glass, Asahi Glass, Pioneer Corp, JFE Holdings, Inpex, IHI and Nippon Steel were also down sharply in the red when the morning session ended.

Among bank stocks, Aozora Bank, Bank of Yokohama, Chiba Bank, Mitsubishi UFJ Financial and Shinsei Bank are down 1.2 to 1.5 percent, while Mizuho Financial and Shizuoka Bank also lost notable ground.

In the automobile space, Honda Motor was up marginally, Hino Motors and Isuzu Motors posted modest gains and Mitsubishi Motor was trading flat. Suzuki Motor and Toyota Motar edged up a bit, while Nissan Motor is gaining over 2 percent.

Unitika, Tokyo Electric Power, Minebea, Nippon Paper Group, Showa Denko KK, Konami and Bridgestone moved higher.

In the currency market, the U.S. dollar traded in the upper 77 yen range in early deals in Tokyo. The yen is currently trading at 77.85 to the U.S. dollar.

Among other markets in the Asia-Pacific region, Shanghai, Hong Kong, Singapore, South Korea and Taiwan are down sharply, while Indonesia and New Zealand are trading modestly lower. Markets across the region ended mostly higher on Friday.

On Wall Street, stocks turned in a lackluster performance on Friday amid lingering concerns about the financial situation in Europe. The major averages eventually ended the session mixed, with the Dow closing just below the unchanged line. The Dow edged down 2.4 points or less than a tenth of a percent to 11,866.4, while the Nasdaq rose 14.3 points or 0.6 percent to 2,555.3 and the S&P 500 climbed 3.9 points or 0.3 percent to 1,219.7.

Major European markets ended lower on Friday. While the U.K.'s FTSE 100 index lost 0.3 percent, the German DAX index and the French CAC 40 index closed lower by 0.5 percent and 0.9 percent, respectively.

Crude oil prices declined on Friday, hurt by concerns that Europe is destined for a protracted double-dip recession. Light, sweet crude for January delivery ended 34 cents lower, or 0.4 percent, at US$93.53 a barrel on the New York Mercantile Exchange, the lowest settlement price in six weeks.