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Asian equities return to losing ways on ongoing discord among European leaders

25 Nov 2011 Evaluate

Equity markets in Asia displayed gloomy trends in Friday trades as investors took to risk aversion after discouraging developments from the European front undermined sentiments. Barring the benchmark in Tokyo, markets across the region drifted to lower levels, a session after showing some signs of recovery. Investors refrained from building fresh positions amid German Chancellor’s hard-line opposition either to bonds issued jointly by the euro zone countries or to an expansion of role of the European Central Bank in their endeavor to avert the sovereign debt crisis contagion. In addition, sentiments also got pummeled by reports that rating agency Fitch slashed Portugal's credit rating to junk status, citing large fiscal imbalances, high debt concerns while another agency Moody’s downgraded Hungary's debt rating by one notch to Ba1, below investment-grade with a negative outlook.

Benchmarks in Hong Kong and Indonesia traded with large cuts of one percent and were the top laggards in the space following the overnight plunge in European markets after Germany again criticized calls for euro bonds, and both Portugal and Hungary saw a ratings downgrade. While the Japanese benchmark remained the only gainer in the Asian space but traded with only marginal gains amid expectations that the Bank of Japan could buy exchange-traded funds to prop up the market.

Shanghai Composite slipped 5.58 points or 0.23% to 2,391.97, Hang Seng plummeted 178.67 points or 1.00% to 17,756.43, Jakarta Composite shaved-off 38.18 points or 1.03% to 3,657.85, KLSE Composite plunged 13.11 points or 0.91% to 1,434.88, Straits Times sank 13.28 points or 0.50% to 2,663.87, Seoul Composite declined 15.79 points or 0.88% to 1,779.27 and Taiwan Weighted inched down 0.44 points or 0.01% to 6,863.95.

On the other hand only Nikkei 225 rose marginally by 8.13 points or 0.10% to 8,173.31.

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