Asian stock markets dropped sharply Wednesday as fresh jitters over a potential downgrade of France's sovereign credit rating and a contraction in manufacturing activity in China sent the euro skidding, while the Australian share market fell to a six-week low.
A tepid start to the Asian day turned sour quickly after Belgian newspaper De Standaard said in an unsourced report on its website that the planned rescue of Franco-Belgian bank Dexia is unworkable, with France possibly having to shoulder a larger share of the bailout-burden.
Data from China showing manufacturing activity contracted in November added to the gloom. "If there was one thing we could hope to count on in these dark and unsettled times, it was that China's economy would continue to tick along. Reports like this obviously put a fair amount of dent into those hopes and sentiment," said Chris Hunter, corporate dealer at Western Union Business in Auckland.
Asian currencies such as the Singapore dollar and the Korean won fell to multiweek lows against the U.S. dollar, while the euro dropped below $1.35 amid speculation France's AAA credit rating could come under threat.
China's preliminary HSBC manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, fell sharply to 48.0 in November compared with a final reading of 51.0 in October.
The fall in the PMI, which reversed a rebound in the final figure for October, raises fresh concerns about a possible sharp slowdown for the world's second biggest economy amid the darkening global growth outlook.
"It is further confirmation that activity is not just consolidating but contracting sequentially," said ING chief economist for Asia Tim Condon.
"The European crisis seems to be now taking a toll on the world's fastest growing economy," said Stan Shamu, a strategist at IG Markets in Melbourne.
Resources, exporters, and financials were sold off as investors worried the West's debt woes will undermine Asia's export-dependent economies.
Shares in Australian dropped sharply as the resource-rich economy's fortunes are closely tied to China's growth cycle. BHP Billiton dropped 3.5% and Rio Tinto fell 2.5%. In Hong Kong, Lenovo dropped 1.7%, and other exporters such as Samsung Electronics and Hynix Semiconductor dropped 2.4% and 4.5%, respectively in Seoul.
The sharp drop in oil prices during Asian trading drove South Korea's S-Oil 6.0% lower and Cnooc down 2.8% in Hong Kong.
January Nymex crude oil futures were $1.43 lower at $96.58 per barrel on Globex.
The euro slipped below $1.35 against the dollar on the Dexia-led speculation on France's credit rating, while the accelerating losses in Asian equities further crimped appetite for the riskier common currency.
A tepid start to the Asian day turned sour quickly after Belgian newspaper De Standaard said in an unsourced report on its website that the planned rescue of Franco-Belgian bank Dexia is unworkable, with France possibly having to shoulder a larger share of the bailout-burden.
Data from China showing manufacturing activity contracted in November added to the gloom. "If there was one thing we could hope to count on in these dark and unsettled times, it was that China's economy would continue to tick along. Reports like this obviously put a fair amount of dent into those hopes and sentiment," said Chris Hunter, corporate dealer at Western Union Business in Auckland.
Asian currencies such as the Singapore dollar and the Korean won fell to multiweek lows against the U.S. dollar, while the euro dropped below $1.35 amid speculation France's AAA credit rating could come under threat.
China's preliminary HSBC manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, fell sharply to 48.0 in November compared with a final reading of 51.0 in October.
The fall in the PMI, which reversed a rebound in the final figure for October, raises fresh concerns about a possible sharp slowdown for the world's second biggest economy amid the darkening global growth outlook.
"It is further confirmation that activity is not just consolidating but contracting sequentially," said ING chief economist for Asia Tim Condon.
"The European crisis seems to be now taking a toll on the world's fastest growing economy," said Stan Shamu, a strategist at IG Markets in Melbourne.
Resources, exporters, and financials were sold off as investors worried the West's debt woes will undermine Asia's export-dependent economies.
Shares in Australian dropped sharply as the resource-rich economy's fortunes are closely tied to China's growth cycle. BHP Billiton dropped 3.5% and Rio Tinto fell 2.5%. In Hong Kong, Lenovo dropped 1.7%, and other exporters such as Samsung Electronics and Hynix Semiconductor dropped 2.4% and 4.5%, respectively in Seoul.
The sharp drop in oil prices during Asian trading drove South Korea's S-Oil 6.0% lower and Cnooc down 2.8% in Hong Kong.
January Nymex crude oil futures were $1.43 lower at $96.58 per barrel on Globex.
The euro slipped below $1.35 against the dollar on the Dexia-led speculation on France's credit rating, while the accelerating losses in Asian equities further crimped appetite for the riskier common currency.
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