Asian Shares End Mostly Lower; Hong Kong Leads Losses

Asian stocks fell on Monday as concerns about a Greek default rose on indications that Europe is losing patience with the country's efforts to cut its debt pile.


Hong Kong's Hang Seng Index led the sell-off, falling 2.8% to 18917.95, while the Shanghai Composite Index shed 1.8% to 2437.79. Australia's S&P/ASX 200 Index fell 1.6% to 4081.50, South Korea's Kospi declined 1.0% to 1820.94 and India's Sensex fell 1.1% to 16745.35. Japanese equity markets were closed Monday for a holiday.

"There's a lack of clear direction in the regional markets. Most investors are just waiting for the Federal Open Market Committee meeting" on Wednesday, said DBS Vickers Hong Kong-based director Peter Lai.

The U.S. central bank will hold an extended meeting this week, and investors will be watching for word of fresh measures to stimulate the struggling U.S. economy.

But Europe took center stage on Monday, with investors increasingly concerned about the lack of a concerted policy response to the region's debt issues.

Reports out over the weekend said that the next installment of financial aid to Greece has been delayed until October, and Europe has warned that further payments would be withheld unless Athens could meet its savings targets.

"Against this backdrop, it is hardly a great surprise that concerns about the euro-zone financial system have grown, sparking fears that Europe could soon suffer from another credit crunch," said strategists at Capital Economics.

Financial stocks were among the worst performers on Monday, with Industrial Bank of Korea down 6.7% in Seoul, and National Australia Bank falling 1.8%, and Macquarie Group down 3.2% in Sydney.

In Hong Kong trading, HSBC Holdings fell 2.6%, while Industrial & Commercial Bank of China lost 4.2%, and Bank of Communications dropped 3.9%.

Swiss bank UBS raising the estimate of its losses from unauthorized trades to $2.3 billion was also likely hurting sector sentiment, according to Lai at DBS Vickers, as "investors may think about other banks."

Meanwhile, Hong Kong-listed apparel firm Esprit Holdings, which generates most of its sales from Europe, extended steep earning-related losses made last week with a 19.8% plunge on Monday.

China Coal Energy tumbled 16.8% before trade in the shares was halted, with reports saying a mine operated by the firm's parent in Shanxi province had been suspended after a fatal flooding incident.

Commodity-sector firms are more closely leveraged to expectations for global growth than many other firms and were also putting in a weak performance on Monday, with PetroChina down 3.2% in Hong Kong, while BHP Billiton dropped 1.7% and iron-ore producer Fortescue Metals Group fell 2.6% in Sydney.

However, Australia's Newcrest Mining managed to advance 0.2%, as investors sought the perceived safety of the precious metal.