Investing.com - Asian stock markets were broadly lower on Tuesday, as a relief rally triggered by Sunday’s Greek election results fizzled out amid concerns over Spain’s mounting borrowing costs.
During late Asian trade, Hong Kong's Hang Seng Index dipped 0.4%, Australia’s ASX/200 Index shed 0.3%, while Japan’s Nikkei 225 Index slumped 0.8%.
Asian equity markets rallied sharply on Monday, as market sentiment was lifted after exit polls showed a slim victory for pro-austerity party New Democracy in weekend elections in Greece, easing fears the debt-laden country would leave the euro zone.
But the relief rally proved to be short-lived, as investors remained jittery amid concerns over the ability of New Democracy to form a strong coalition government.
Markets also shifted their focus to Spain, where the yield on the country’s 10-year government bonds surged to a euro-era high of 7.28%, above the critical 7% threshold which prompted bailouts in Greece, Ireland and Portugal.
The spike in borrowing costs came in spite of efforts to insulate Madrid from the effects of the ongoing sovereign debt crisis by agreeing on a EUR100 billion aid package for Spanish banks.
Spain became the fourth euro zone nation to seek a rescue last week. Some investors fear it is only a matter of time before Italy becomes the next country to ask for help.
Investors now awaited the outcome of a Group of 20 summit in Mexico, amid hopes it could produce fresh measures to combat the crisis in Europe.
In a statement, G-20 leaders said they will "take the necessary actions" to strengthen the global economy, and if growth weakens substantially, countries without heavy debt loads stand ready to stimulate their economies, according to a draft communiqué from the summit.
Markets were also eying the start of a two-day Federal Reserve policy-setting meeting, amid growing speculation the central bank will move to stimulate growth in the world’s largest economy.
In Tokyo, the Nikkei came off the previous session’s one-month high, as exporters and financial sector stocks gave back most of their previous day’s gains.
Mitsubishi UFJ Financial Group shed 0.85%, while investment banks Nomura Holdings and Daiwa Securities fell 1.8% and 0.75% respectively.
Shares in exporters with high exposure to Europe slumped, with automakers Mazda and Nissan declining 1.9% and 2.1% respectively, while Canon retreated 1.25%.
On the upside, Sharp saw shares rally 3.2% after announcing it might expand its smart-phone partnership with Hon Hai Precision Industry of Taiwan.
Meanwhile, shares in Hong Kong were lower, weighed down by a 1% decline in index heavyweight HSBC Holdings. HSBC, which is Europe’s largest bank, commands a 15% weighting on the Hong Kong benchmark.
Shares in troubled apparel company Esprit Holdings fell 2.55%. The Hong Kong-based retailer counts Europe as its largest market.
Elsewhere, shares in Australia were mildly weaker, weighed down by losses for resource firms.
Iron ore producer Fortescue Metals Group declined 2.4%, while steelmakers BlueScope Steel and OneSteel fell 1.6% and 1% respectively.
Shares in newspaper publisher Fairfax Media plunged 7.7% one day after the announcing a three-year restructuring initiative that includes slashing 1,900 jobs.
Looking ahead, European stock markets looked set to open mildly lower, as concerns over Spain’s soaring bond yields and fears that the country will need to be bailed out weighed.
The EURO STOXX 50 futures pointed to a flat open, France’s CAC 40 futures declined 0.15%, London’s FTSE 100 futures eased down 0.1%, while Germany's DAX futures pointed to a decline of 0.1% at the open.
Later in the day, the ZEW Institute was to release reports on economic sentiment in Germany and wider euro area, while the U.S. was to publish official data on building permits and housing starts.
Meanwhile, leaders from the Group of 20 nations are to hold a second day of talks in Los Cabos, Mexico.
During late Asian trade, Hong Kong's Hang Seng Index dipped 0.4%, Australia’s ASX/200 Index shed 0.3%, while Japan’s Nikkei 225 Index slumped 0.8%.
Asian equity markets rallied sharply on Monday, as market sentiment was lifted after exit polls showed a slim victory for pro-austerity party New Democracy in weekend elections in Greece, easing fears the debt-laden country would leave the euro zone.
But the relief rally proved to be short-lived, as investors remained jittery amid concerns over the ability of New Democracy to form a strong coalition government.
Markets also shifted their focus to Spain, where the yield on the country’s 10-year government bonds surged to a euro-era high of 7.28%, above the critical 7% threshold which prompted bailouts in Greece, Ireland and Portugal.
The spike in borrowing costs came in spite of efforts to insulate Madrid from the effects of the ongoing sovereign debt crisis by agreeing on a EUR100 billion aid package for Spanish banks.
Spain became the fourth euro zone nation to seek a rescue last week. Some investors fear it is only a matter of time before Italy becomes the next country to ask for help.
Investors now awaited the outcome of a Group of 20 summit in Mexico, amid hopes it could produce fresh measures to combat the crisis in Europe.
In a statement, G-20 leaders said they will "take the necessary actions" to strengthen the global economy, and if growth weakens substantially, countries without heavy debt loads stand ready to stimulate their economies, according to a draft communiqué from the summit.
Markets were also eying the start of a two-day Federal Reserve policy-setting meeting, amid growing speculation the central bank will move to stimulate growth in the world’s largest economy.
In Tokyo, the Nikkei came off the previous session’s one-month high, as exporters and financial sector stocks gave back most of their previous day’s gains.
Mitsubishi UFJ Financial Group shed 0.85%, while investment banks Nomura Holdings and Daiwa Securities fell 1.8% and 0.75% respectively.
Shares in exporters with high exposure to Europe slumped, with automakers Mazda and Nissan declining 1.9% and 2.1% respectively, while Canon retreated 1.25%.
On the upside, Sharp saw shares rally 3.2% after announcing it might expand its smart-phone partnership with Hon Hai Precision Industry of Taiwan.
Meanwhile, shares in Hong Kong were lower, weighed down by a 1% decline in index heavyweight HSBC Holdings. HSBC, which is Europe’s largest bank, commands a 15% weighting on the Hong Kong benchmark.
Shares in troubled apparel company Esprit Holdings fell 2.55%. The Hong Kong-based retailer counts Europe as its largest market.
Elsewhere, shares in Australia were mildly weaker, weighed down by losses for resource firms.
Iron ore producer Fortescue Metals Group declined 2.4%, while steelmakers BlueScope Steel and OneSteel fell 1.6% and 1% respectively.
Shares in newspaper publisher Fairfax Media plunged 7.7% one day after the announcing a three-year restructuring initiative that includes slashing 1,900 jobs.
Looking ahead, European stock markets looked set to open mildly lower, as concerns over Spain’s soaring bond yields and fears that the country will need to be bailed out weighed.
The EURO STOXX 50 futures pointed to a flat open, France’s CAC 40 futures declined 0.15%, London’s FTSE 100 futures eased down 0.1%, while Germany's DAX futures pointed to a decline of 0.1% at the open.
Later in the day, the ZEW Institute was to release reports on economic sentiment in Germany and wider euro area, while the U.S. was to publish official data on building permits and housing starts.
Meanwhile, leaders from the Group of 20 nations are to hold a second day of talks in Los Cabos, Mexico.