Asian shares hit by eurozone debt, market holidays

HONG KONG: Asian shares dipped on Monday as uncertainty over European debt, upcoming important data and holidays in two of the world's major markets combined to dampen enthusiasm.

A minor surge on Wall Street at the end of last week provided some support but not enough to keep the region in positive territory.

Tokyo was 0.05 percent lower by the break, Sydney lost 0.31 percent in early trade while Hong Kong opened flat, losing 0.06 percent in the first minutes of trading.

Seoul was off 0.31 percent and Shanghai dropped 0.58 percent as players continued to fret over a possible stalling of China's growth.

Shanghai has ended the past seven sessions in the red.

In Tokyo dealers said they were expecting a day of thin trade because of a lack of fresh buying incentives and holidays in London and New York.
Investors were also awaiting a string of key Japanese and US data due later this week including domestic industrial output figures and a US jobs report, brokers said.

"There continues to be a lack of buying incentives at home while concerns about a slowdown in the global economy and European debt problems still weigh on the market," said Hiroichi Nishi, general manager at SMBC Nikko Securities.

US stocks closed higher Friday helped by strong gains by banking and finance shares amid light trade before the long Memorial Day holiday weekend.

The Dow Jones Industrial Average closed up 38.82 points (0.31 percent) at 12,441.58.

"Markets will likely remain nervous in this environment and it is difficult to see risk appetite improving to any major degree," Credit Agricole said in a note to clients.

On the forex markets, unimpressive US economic data on Friday, including weak pending homes sales, kept the dollar down, but the ongoing travails of the Greek government were ensuring the euro could not run away with things.

Underscoring the severity of the problems facing Greece, the European Union's economic affairs commissioner Olli Rehn was Sunday quoted as saying the EU will follow the IMF in blocking the June transfer of more Greek aid unless Athens does more to fix its public finances.

"We Europeans are setting the same conditions as the International Monetary Fund," Germany's Spiegel weekly quoted Rehn as saying. "The situation is very serious."

He said the European Union would decide after examining the latest quarterly audit of Greek public finances by experts from the European Central Bank, the EU and IMF -- which Spiegel said would include some "alarming" findings.

The audit will say that Athens is missing all budget promises made last year in return for an EU-IMF 110-billion-euro ($156-billion) rescue, Spiegel reported, without saying where it obtained the information.

Greek Finance Minister George Papaconstantinou told local television the report was "completely unrelated with reality", Dow Jones Newswires reported, citing a transcript provided by his ministry.

The euro fetched $1.4298 in Tokyo morning trade, down from $1.4317 in New York late Friday. The single European currency inched down to 115.58 yen from 115.61 yen. The dollar rose to 80.81 yen from 80.77 yen. (AFP)