Asian stocks are likely to go down after fears on euro zone debt weighed on Wall Street, New York, while measures to limit credit and debit card fees increased fears of tightened banks’ regulation.
The major US indices closed as much as two percent lower on Friday, with several banks and credit card companies declining after the US Senate voted to limit fees on credit and debit card transactions. Economic fears over the euro zone also weighed with Josef Ackermann, the Deutsche Bank Chief Executive, saying the US$1 trillion or S$1.3 trillion euro zone rescue package would save Italy and Spain, but doubted Greece could repay its debt.
European and British stocks closed more than three percent lower, as many investors doubted the euro zone would see economic growth, while some of its members suffered under austerity measures. Wall Street-listed Asian stocks dropped 1.9 percent, while MSCI’s measure of Asia Pacific stocks excluding Japan also fell 1.06 percent.
The Euro recorded an 18-month low today, as fears on debt crisis were intensified by comments made by European Central Bank policymaker Axel Weber about the lingering dangers to financial stability.
The Yen strengthened against both the US dollar and the Euro on renewed buying, but the Japanese market suffered a weak start, caused by the stronger yen with Nikkei traded in Chicago 130 points below the last closing level in Osaka.
Australian shares also started weak, with the price index share dropping 1.7 percent to 4,531, an 80-point discount to the index that closed on Friday.