Asian stocks took a hit Tuesday amid warnings from rating agencies Moody's and Standard & Poor's that the sovereign ratings of European Union countries could be downgraded if European leaders did not take more action to stem the region's economic downturn and fix its troubled banking system.
Despite an accord reached Friday by European leaders in Brussels that will put EU member states on the track towards greater fiscal union, the ratings agencies said Europe's economic woes look set to continue.
Investor concern also pushed the yields on 10-year Italian government bonds up to 6.5%, which will make it increasingly hard for Italy to pay off its massive debts.
Japanese shares (EWJ, quote ) were down 1.70%, Singaporean shares ( EWS , quote ) were down 2.02%, Australian stocks ( EWA , quote ) were down 3.07%, South Korean shares ( EWY , quote ) were down 3.18% and Chinese shares ( YAO , quote ) closed down 3.90%.
Olympus shares are continuing their rise, jumping 5.4 percent following news that independent auditors are set to approve its financial statements from the last five years. The year ending in March 2007, however, will be approved with qualification. Olympus acknowledged last month that for decades it had covered up huge investment losses and used a number of acquisitions to clean up its books.
Samsung shares fell 3.1 percent following news that Intel's fourth quarter earnings will be lower than projected because of hard disk drive shortages due to flood damage in Thailand.
The falling price of oil, copper and other resources sent shares of Australian mining company Rio Tinto ( RIO , quote ) down more than 2%, so look for miners to remain under pressure.
European and Asian currencies, however, remained strong against the dollar. The euro rose 0.12% to $1.3203 against the dollar, while the British pound increased 0.15% to $1.5602 by Tuesday morning.
China's yuan appreciated 0.07% to 6.3648 against the dollar.
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