Wednesday, May 19, 2010

Asian stocks down as Europe woes linger

TOKYO – Asian stock markets fell sharply Wednesday as Germany's move to tighten control over trading of government debt and financial shares underscored that Europe is still struggling to stabilize the euro.

Japan's benchmark Nikkei 225 stock average dropped 200.36 points, or 2 percent, to 10,042.28. South Korea's Kospi index lost 34.56 points, or 2.1 percent, to 1,608.68 and Australia's S&P/ASX 200 index was off 1.8 percent at 4,421.10.

Selling spread across Asia after the Dow Jones industrial average dropped 114.88 points, or 1.1 percent, to 10,510.95 with Germany's plan to tighten financial regulations unnerving investors.

The euro, the currency shared by 16 European nations, has been driving global stock trading for weeks as investors interpreted its slide as a sign of continuing economic problems in Europe. It hit a new four-year low of $1.2160 on Tuesday.

Germany announced a ban Tuesday on so called naked short-selling of eurozone government debt and shares of major financial companies, a move that came as European officials seek to strengthen control of markets.

Naked short selling was cited as one of the factors in world markets' turbulence during the 2008 financial crisis. Germany's step brought underscored a fear that a further drop in the euro will continue to rattle world markets.

- Courtesy of Yahoo News

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