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Tuesday, November 30, 2021

Asia stocks mixed after Cyprus vote on bailout

BANGKOK (AP) — Asian stock markets were mixed Wednesday after Cypriot lawmakers rejected a tax on bank deposits that would have partly funded an emergency bailout to save the Mediterranean country from financial collapse.

The vote by Cyprus’ parliament Tuesday rejected a plan cobbled together by international lenders to provide the country with 15.8 billion euros ($20.4 billion) to bail out its heavily indebted banks and shore up government finances.

If it doesn’t get the money, the banks could fail, Cyprus’ government finances could be ruined for years and the country could face expulsion from the union of 17 countries that use the euro. That’s a scenario European policymakers fought to avoid with Greece with its bailouts because of fears it would splinter the currency union.

Hong Kong’s Hang Seng rose 0.7 percent to 22,198.37. South Korea’s Kospi fell 0.4 percent to 1,971.71. Australia’s stock market was dragged lower by mining shares. The S&P/ASX 200 fell 0.3 percent to 4,972. Benchmarks in Taiwan and Singapore also fell. Mainland Chinese shares rose.

Stock markets in Japan were closed for a public holiday.

“There seems to be no quick and easy way out of the Cyprus mess and the markets will likely enter a period of considerable uncertainty following rejection by the Cyprus’ parliament of the bailout terms offered,” analysts at Credit Agricole CIB in Hong Kong said in an email commentary.

But strong housing data from the U.S. softened the damage to confidence. Government data showed U.S. builders stepping up construction of homes, while a private report showed the number of Americans with equity in their homes increased last year. That suggests one of the biggest drags from the housing crisis is easing.

Fears over uncertainty about Cyprus have also been contained by European Central Bank’s backstop to euro nations. The ECB said after the vote that it would continue to provide emergency liquidity to Cypriot banks to make sure they do not collapse.

Stocks were mixed Tuesday after the eurozone’s debt woes offset the encouraging housing data. The Dow Jones industrial average rose marginally to 14,455.82. The Standard & Poor’s 500 index fell 0.2 percent to 1,548.34. The Nasdaq composite index dropped 0.3 percent to 3,229.10.

Benchmark oil for April delivery was up 20 cents to $92.36 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.58 to finish at $92.16 a barrel on the Nymex on Tuesday.

In currencies, the euro was nearly unchanged at $1.2874 from $1.2875 late Tuesday in New York. The dollar rose to 94.98 yen from 95.09 yen.

Source: AP

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