SINGAPORE (Dow Jones)--Asian stock markets were mostly lower, while the U.S. dollar was broadly higher against the euro and regional currencies Thursday amid jitters over the possibility Greece may exit the eurozone.
"The latest meeting of European leaders at the G-20 summit in Cannes has firmly convinced the market that the move by Greece to call for a referendum on something that looked like a done deal has not gone down well with the European powerhouses," said Jason Hughes at IG Markets Singapore. He said the current situation "leaves a very uncertain month ahead for financial markets." The weak sentiment weighed copper and oil prices.
Australia's S&P/ASX 200 fell 0.5% and South Korea's Kospi Composite slipped 1.5%. Hong Kong's Hang Seng Index lost 1.0%, while China's Shanghai Composite bucked the regional trend, tacking on 1.0%. Markets in Japan were shut for a holiday.
Dow Jones Industrial Average futures were down 120 points in screen trade.
The euro fell against the U.S. dollar and Japanese yen after comments from French President Nicolas Sarkozy and German Chancellor Angela Merkel indicated Greece's surprise referendum on the bailout plan, set for Dec. 4, is essentially a vote on whether it wants to remain in the eurozone. In addition, the European Union and the International Monetary Fund Wednesday said they will not release the next aid payment to Greece until after the proposed referendum, set for Dec. 4-5, raising concerns of a "disorderly" Greek default.
The single currency was at $1.3688 against the dollar, from $1.3748 late Wednesday in New York, and at Y106.84 against the yen, from Y107.27. The greenback was roughly steady against the yen at Y78.04, from Y78.05. The Australian dollar, a barometer of regional risk-sentiment, was at $1.0240 against the U.S. dollar, from $1.0350 late Wednesday in Sydney.
Investors were also awaiting the European Central Bank's policy decision and post-meeting press conference, the first under new president Mario Draghi, later Thursday and for any catalysts from the Group of 20 nations' summit.
In Seoul, LG Electronics tumbled 8.4% on concerns over earnings dilution, as a person familiar with the matter told Dow Jones Newswires the company is seeking to raise at least KRW1 trillion through a rights offer. The Korea Exchange has asked LG Electronics to clarify the matter and the company is obliged to respond before 0900 GMT. A company spokeswoman told Dow Jones Newswires the electronics maker is investigating the speculation. Other LG companies also fell, with LG Display down 5.4% and LG Chem off 2.7%
Bucking the region's declines, China's shares gained ground on signs of policy easing. "Chinese authorities have shifted to an accommodative stance. They are intent on injecting liquidity to the capital market through bank loans and open-market operations. So investors are returning to the market to buy shares," said Soochow Securities analyst Deng Wenyuan.
Insurers led the rise on expectations a market rally will improve their investment returns, with China Life Insurance's Hong Kong and Shanghai shares adding 6.6% and 4.1% respectively.
Spot gold was at $1,729.30 per troy ounce, down $8.10 from its New York settlement on Wednesday. December Nymex crude oil futures were down 76 cents at $91.75 per barrel on Globex.
-John Phillips, Dow Jones Newswires;
+65-6415-4142; john.phillips@dowjones.com
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