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Asia stocks drop on eurozone worries

Asia stocks drop on eurozone worries

Asian stocks dropped Monday, ignoring signs of job improvement in the U.S., as traders continued to fret about Europe's unfolding sovereign debt drama.
Benchmark oil fell to $101 per barrel while the dollar strengthened against the euro but fell against the yen.
South Korea's Kospi fell 1.1 percent to 1,822.42 while Hong Kong's Hang Seng index was 0.9 percent lower at 18,422.23. Benchmarks in Singapore, Taiwan, India and Indonesia also were lower. In Japan, financial markets were closed for a public holiday.
Bucking the negative trend were mainland Chinese shares, which rose amid promises by Beijing to channel more bank lending to struggling entrepreneurs while keeping inflation and surging housing costs in check. The Shanghai Composite Index jumped 1.4 percent to 2,194.57. The smaller Shenzhen Composite Index added 1.8 percent to 832.81.
China tightened lending and investment curbs last year to cool its overheated economy but has reversed course in recent months following a slump in global demand that has hurt exporters and led to job losses.
Other positive economic news came out of the U.S., where the unemployment rate fell to 8.5 percent in December, the lowest level in nearly three years.
But signs of strength in the U.S. job market were not enough to offset worries about Europe's debt. On Friday, Italy's borrowing costs spiked to dangerously high levels. The country is now paying over 7 percent to borrow for 10 years, a sign that investors are concerned the country could default on its debts. Greece, Portugal and Ireland were forced to seek a bailout after their borrowing rates rose above 7 percent.
German Chancellor Angela Merkel and French President Nicolas Sarkozy are to meet later Monday in Berlin to discuss the eurozone debt crisis. But markets no longer react to such powwows, having witnessed Europe pledge time and again to stem the crisis _ only to see it worsen.
"We are very much in a situation now where the market is not inclined to react positively to statements of intent," said Ric Spooner, chief market analyst at CMC Markets in Sydney.
"Concrete, locked-in, agreed-to steps must be taken, and those steps have to be sufficient to provide a mechanism for halting the contagion risk and for putting in place a mechanism for a reasonable growth scenario," Spooner said.
Bank stocks fell on concerns that the debt crisis will spread through the financial industry. Hong Kong-listed Agricultural Bank of China fell 0.6 percent and Commonwealth Bank of Australia shed 0.2 percent. China Construction Bank lost 0.2 percent.
Heavy industrial shares also fell. Korean steelmaking giant POSCO lost 2.5 percent while India's Tata Steel Ltd. lost 1.9 percent.
Zijin Mining Group, China's biggest gold miner, lost 3.8 percent following a drop in gold prices.
The euro continued its slide against the dollar. On Monday, it fell to $1.2694 from $1.2724 late Friday in New York. The dollar fell to 76.92 yen from 77.02 yen.
In energy trading, benchmark crude for February delivery fell 45 cents to $101.11 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $101.56 in New York on Friday.


Updated : 2021-06-15 02:35 GMT+08:00