Shutterstock photo
Markets

Asian shares tumble on Cyprus deposit levy; Nikkei down 2.07%

Shutterstock photo

Shutterstock photo

Investing.com - Asian stocks are sliding to start the week and look poised for the largest one-day drop in a month as traders eschew riskier assets on news that Cyprus could be on the brink of departure from the euro zone.

In Asian trading Monday, Japan's Nikkei 225 tumbled 2.07% as USD/JPY slid 0.65%. The dollar spiked against most of its major rivals except for the yen on Monday as traders fear a request by euro zone finance ministers could spark a run on Cyprus banks.

Hong Kong's Hang Seng slipped 1.96% while the Shanghai Composite is off by 0.85%.

On Sunday, Cyprus' parliament delayed a vote on the issue although there are rumors the European Central Bank is pressuring the tiny island nation to hold the vote immediately. Cyprus is home to just 1 million people.

If parliament rejects the deposit levy plan, Cyprus could go bankrupt. In turn, that could mean the county leaves the euro zone. Anastasiades requested the vote by delayed, but gave no reason for the request, according to state media reports.

The news is seen plaguing riskier currencies and the stocks in those markets. Australia' S&P/ASX 200 fell 1.46% and AUD/USD fell 0.51% as traders fretted over a plan by the other 16 euro zone nations and the International Monetary Fund to levy a one-time 6.75% tax on all deposits to Cyprus banks under EUR100,000.

That plan is expected to raise EUR5.8 billion to help the country's ailing banks. Cyprus' banks are in peril after losing EUR4.5 billion on investments in Greek bonds.

The levy plan also includes a 9.9% tax on deposits of over EUR100,000. The plan is seen as a bailout at the expense of ordinary citizens in Cyprus, which could hasten a run on the country's banks and the country's departure from the euro zone.

New Zealand's NZSE 50 is lower by 1.02% while South Korea's Kospi is off 0.55%. Singapore's Straits Times Index is down 0.60%. S&P 500 futures are plunging 1.16%.

Investing.com - Investing.com offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

Read more News on Investing.com or Follow us on Twitter at @ Newsinvesting

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

ForEx