Financial headlines continue their repetitive, three-year trend, stating once again that debt crisis turmoil and economic confusion have lowered Asian stocks on Monday.
Benchmark oil fell to $102 a barrel, and though the dollar gained momentum opposite the euro, it lost value against the yen.
The Nikkei also fell 1.4% to 9,502.95 as the yen increased. South Korea’s Kospi also slid, while the Bank of Korea broadcasted a lower 2012 economic outlook after a December estimate of 3.7%.
Europe’s most crucial concerns involve Spain and Italy at the moment, as Spain’s government bond yields increased to 5.93% and Italy’s to 5.52%. The figures reveal the deteriorating investor confidence and the countries’ urgency for additional funds. Government spending will continue to see cuts, putting a damper on European growth and efforts to pull the region’s smaller members out of their ever growing debt.
“Further pressure on Spanish bond spreads is likely especially as it has become clear that the country’s banks are relying more on European Central Bank funding,” Credit Agricole CIB analysts said.
In the meantime, China posted a 8.1% growth rate in the first quarter. Last quarter’s figures reached 8.9%, making this year’s progress the slowest in nearly three years. However, numerous analysts so not see this as a major concern.
“It may be slowing but that’s because the world in general is slowing. You can’t expect China’s growth to be 9%, 9.5%” while the rest of the world struggles, explained Tom Kaan of Louis Capital Markets.
“I still believe this is a good opportunity to buy. Fundaments have not changed for the USA. Europe problems are returning, but not in a big way,” he claimed.
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