Asia stocks mixed as Cyprus fears linger; Hang Seng gains 1%

Published 03/20/2013, 03:45 AM
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Investing.com - Asian stock markets were mixed during late Asian trade on Wednesday, after Cypriot lawmakers rejected the controversial bailout deal that would tax the nation’s bank deposits.

During late Asian trade, Hong Kong's Hang Seng Index rose 1%, Australia’s ASX/200 Index ended 0.4% lower, while Japan’s Nikkei 225 Index remained closed for a public holiday.

Cyprus’s President Nicos Anastasiades called an emergency meeting with political leaders to look at alternatives after parliament rejected the terms of the bailout agreement in a vote Tuesday.

Following the vote, the European Central Bank said it will provide liquidity to Cypriot banks within existing rules.

In Hong Kong, the Hang Seng moved further away from a three-month low hit earlier in the week, but gains were limited as market players remained concerned over the economic outlook for China, the world’s second largest economy.

The China banking sector were among the biggest gainers on the index, with China Construction Bank shares climbing 2.7%, Industrial and Commercial Bank of China rising 3.1% and Bank of China adding 2.6%.

Hong Kong’s blue-chip exporters also contributed to gains, with clothing retailer Esprit Holdings rallying 5% and Li & Fung advancing 2.4%, while footwear major Belle International Holdings climbed 3.9%.

On the downside, index heavyweight HSBC Holdings declined 0.7%, as concerns over a bailout deal for Cyprus remained in focus.

Meanwhile, in Australia, the benchmark ASX/200 Index ended close to a five-week low, as miners led losses amid weakness in copper prices.

New York-traded copper prices fell near a seven-month low overnight, amid concerns over a slowdown in demand from top consumer China. Australian commodity producers are heavily reliant on Chinese demand for raw materials.

Rio Tinto and BHP Billiton slumped 2.3% and 2.2% respectively, while iron ore maker Fortescue Metals Group declined 2.3%.

Looking ahead, European stock market futures pointed to a mildly higher open, as sentiment remained supported amid growing expectations that the European Union will renegotiate a deal with Cyprus to keep the country in the euro zone.

The EURO STOXX 50 futures pointed to a gain of 0.4% at the open, France’s CAC 40 futures added 0.4%, London’s FTSE 100 futures eased up 0.3%, while Germany's DAX futures pointed to a rise of 0.4% at the open.

Investors were looking ahead to the outcome of the Federal Reserve’s policy meeting later in the trading day, after data last week showing that U.S. inflation was contained left the way clear for the bank to continue its asset purchase program.

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