CANBERA (dpa-AFX) - Asian stocks fell on Monday as the sudden death of the mercurial leader of nuclear-armed North Korea, Kim Jong Il, added to ongoing uncertainties in the Eurozone.
Fitch Ratings said Friday that it would consider downgrading its ratings on government bonds issued by six European nations, including Italy and Spain, heightening concerns about Europe's sovereign debt crisis.
Meanwhile, ECB President Mario Draghi damped expectations that the bank will step up bond purchases and warned of the costs of a eurozone break-up, saying struggling euro-zone countries that leave the euro bloc would still face great economic difficulties afterwards.
Japan's Nikkei index fell 1.3 percent to a three-week low, mirroring weak regional stocks after Fitch Ratings put France on a negative outlook and Kim Jong-il, North Korea's longtime leader, died of heart failure, sparking fears of regional instability. The broader Topix index lost a percent, with financials, shipping companies and securities firms pacing the declines.
Scandal-hit Olympus lost almost 9 percent after Harris Associates LP, based in Chicago, and Southeastern Asset Management Inc., based in Memphis, Tenn., which together hold nearly 10 percent of the company's outstanding shares, have called for the resignation of the entire board. Nissan Motor rose 2.1 percent after the automaker said it would convert its subsidiary Aichi Machine into a wholly-owned unit.
China's Shanghai Composite index eased 0.3 percent after data from the National Bureau of Statistics showed house prices in most of China's major cities declined for a second consecutive month in November amid government's efforts to cool property market. Hong Kong's Hang Seng index fell 1.2 percent.
Australian shares fell sharply, with retailers bearing the brunt of the selling after Billabong forecast a decline in earnings for the first half of the current financial year, citing extremely challenging external trading environment. Shares of the surfwear company plummeted 44 percent, while fellow retailers Wesfarmers, Myer, JB Hi-Fi, Harvey Norman and David Jones slumped 3-9 percent. The benchmark S&P/ASX 200 lost 2.4 percent and the broader All Ordinaries index fell 2.5 percent.
The resources sector lost ground, with major miners BHP Billiton and Rio Tinto losing around 2.5 percent each, while smaller rival Fortescue tumbled 3.9 percent. Eldorado lost 2.3 percent after it has agreed to buy smaller rival European Goldfields for about C$2.5 billion. Oil & gas producer Woodside closed 3.4 percent lower on saying that it might delay an investment decision on its liquefied natural gas project in WA's Browse Basin. Rival Oil Search fell 3.6 percent and Santos lost 3.7 percent.
In the financial sector, Commonwealth Bank of Australia shed 1.7 percent after former chief executive officer Ralph Norris warned that the bank regulator in Australia is moving too fast on new international banking rules. ANZ fell 1.3 percent, NAB lost 1.2 percent and Westpac slid 2.2 percent.
South Korea's Kospi average fell as much as 5 percent at one point before recouping some of its loss and ending down 3.4 percent at a three-week low, as the death of North Korean dictator Kim Jong Il raised fears of increased political instability in the region. The South Korean won tumbled to a two-year low against the green back on fears that tension on the Korean peninsula may escalate.
Tech shares led the decliners, with Samsung Electronics, LG Display LCD, LG Electronics and Hynix losing between 3.6 percent and 5.9 percent. Automaker Hyundai Motor shed 1.2 percent, steelmaker POSCO lost 1.7 percent, shipbuilder Hyundai Heavy Industries tumbled 3 percent and oil refiner SK Innovation slumped 6.4 percent.
New Zealand's benchmark NZX-50 closed 0.7 percent lower, with companies tied to the Australian economy pacing the declines, after a profit warning from surfwear retailer Billabong stoked concerns that growth in the nation's biggest export market is faltering. Resins maker Nuplex lost 1.8 percent, outdoor equipment retailer Kathmandu Holdings tumbled 3.9 percent, construction firm Fletcher Building plunged a little over 4 percent and Australian wealth manager AMP plummeted 5.8 percent.
Also adding to the negative sentiment, data released today showed that New Zealand consumer confidence tumbled in the fourth quarter to the lowest level since the depths of recession in 2009.
Elsewhere, India's Sensex was down 0.9 percent and Singapore's Straits Times fell 1.6 percent, but the Indonesian market was marginally higher.
On Wall Street, stocks ended a choppy session on a lackluster note Friday after Fitch Ratings affirmed France's AAA credit rating but revised its outlook to 'negative' from 'stable ' prompted by the heightened risk of contingent liabilities to the French state arising from the worsening economic and financial situation across the Eurozone.
The ratings agency also placed its credit ratings for Belgium, Spain, Slovenia, Italy, Ireland and Cyprus on rating watch negative. The Dow edged down 2.4 points or less than a tenth of a percent, while the Nasdaq gained 0.6 percent and the S&P 500 added 0.3 percent.
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