Asian Stocks Track Global Retreat as Progress Stalls on Greece

Updated on

Asian stocks fell as European officials resumed talks on Greece’s bailout after negotiations broke down the previous day.

The MSCI Asia Pacific Index lost 0.3 percent to 149.35 as of 5:47 p.m. in Tokyo. Shares retreated after Greece and its creditors on Wednesday exchanged dueling proposals but failed to reach a breakthrough. Prime Minister Alexis Tsipras will meet his country’s creditors again in Brussels on Thursday to try and end a standoff that has brought his country to the cusp of a default.

“What we’re looking at now is a classic European fudge,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. “There will be some temporary bridging to get through the IMF payment next Tuesday. We then start anticipating the next major deadline.”

Failure to close a deal by the weekend would increase the chance that Greece would have to impose capital controls to prevent a run on its banks. Greeks have withdrawn about 20 percent of deposits held by the nation’s lenders this year as concern of an exit from the euro intensified.

Even if he pulls off a deal with creditors, Tsipras may struggle to secure the needed endorsement of the Greek parliament as some of the more populist and radical members of his ruling Syriza party are threatening to vote against the compromise plan he offered creditors this week.

China Slides

Chinese markets slumped even after the government announced plans to scrap a bank-lending limit as it seeks to stoke growth. The Shanghai Composite Index fell 3.5 percent, while Hong Kong’s Hang Seng China Enterprises Index, a gauge of Chinese equities listed in the city, lost 1.6 percent.

China intends to remove a limit capping commercial banks’ loans at 75 percent of deposits, according to a draft law amendment posted online after markets closed Wednesday. The proposal, which needs to be approved by the legislature, boosts banks’ flexibility to manage lending.

Japan’s Topix index retreated 0.5 percent. The Nikkei 225 Stock Average slid 0.5 percent after climbing Wednesday to its highest close since 1996. The gauge was weighed down by Fanuc Corp. which slumped 2.7 percent after Goldman Sachs Group Inc. removed the robot-maker from its “conviction list” and lowered its price target.

Australia’s S&P/ASX 200 Index dropped 1 percent, while New Zealand’s NZX 50 Index lost 0.7 percent. Melbourne-based Slater & Gordon Ltd. plunged 17 percent amid an accounting probe of an acquisition target. South Korea’s Kospi was little changed.

E-mini futures on the Standard & Poor’s 500 Index rose 0.4 percent after the underlying measure dropped 0.7 percent on Wednesday.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE