Asian markets lower amid euro concerns

Concerns over Europe's debt crisis returned to the forefront yesterday, leaving Asian markets mostly lower while the euro remained under pressure against the dollar and yen.
Despite upbeat economic data from the US and Europe, dealers turned their attention to indebted Greece and Spain while banks deposited a record amount of cash with the European Central Bank, raising credit crunch fears.
Sydney finished 1.08 percent lower, or 45.1 points, to 4,142.70, Tokyo fell 0.83 percent, or 71.40 points, to end at 8,488.71, while Seoul lost 0.13 percent, or 2.48 points, to close at 1,863.74.
Hong Kong ended 0.46 percent higher, or 86.10 points, at 18,813.41 while Shanghai ended down 0.97 percent, or 20.94 points, at 2,148.45.
In Greece, Prime Minister Lucas Papademos said the nation faced an "uncontrolled default" in March unless unions and employers can quickly agree on cuts to labour costs.
He said the labour issue would be key to an EU-IMF evaluation of Greece's economy later this month and determine the future of a second bailout agreement for the country.
"Without the agreement and the funding linked to it, Greece faces an immediate danger of uncontrolled default in March," he warned.
There are fears that an uncontrolled default could infect other weak eurozone member states and threaten the whole euro project.
Dealers were also given a knock by news that the regional government of Valencia in Spain was late in repaying a 123 million euro debt to Deutsche Bank, leading to speculation Spain could be forced into a bailout.
Also, banks deposited a record 453.18 billion euros (USD 591 billion) with the ECB on Tuesday, suggesting that they remain reluctant to lend to each other amid ongoing market tension.
The figure broke a previous record for the facility of 452.03 billion euros set last week, the central bank said.
The move comes after the central bank last month lent a record 489.2 billion euros to 532 banks in a three-year refinancing operation to avert a possible credit crunch.
"Sentiment has soured once again as markets resume their focus on eurozone problems," Mitul Kotecha, strategist at Credit Agricole, said in a note to clients, according to Dow Jones Newswires.
However France raised 7.963 billion euros in new long-term bonds yesterday in a closely watched sale that may ease investor concerns.
Europe's main stock markets rose slightly in early trade with London's benchmark FTSE 100 index up 0.18 percent, Frankfurt's DAX 30 climbing 0.16 percent and in Paris the CAC 40 gained 0.11 percent.
The euro remained under pressure, fetching 98.58 yen in early European trade – a level last seen in December 2000 – and USD 1.2836, compared with 99.28 yen and USD 1.2941 in New York late Wednesday.
The dollar fetched 76.81, compared with 76.70 yen.
Oil weakened after hitting eight-month highs in New York late Wednesday as the European Union moved closer to imposing a ban on the import of Iranian crude over its alleged nuclear weapons programme. Europe is Iran's second-biggest oil customer.
Tehran on Wednesday renewed its threat to close off the crucial Strait of Hormuz shipping lane if sanctions are imposed and warned the US against keeping a naval presence in the oil-rich Gulf, stoking tensions between the foes.
New York's main contract light sweet crude for delivery in February gave up USD 1.14 to USD 102.50 per barrel. The contract on Wednesday jumped to an eight-month high of USD 103.74.
Brent North Sea crude for February delivery lost USD 1.02 at USD 113.45.
Gold stood at USD 1,612.55 an ounce at 1110 GMT compared with USD 1,602.40 late Wednesday.

(AFP)