Asian stock markets fall

Unsettling news about Europe's debt crisis and disappointing US corporate earnings weighed on Asian stock markets on Tuesday. Strong headwinds continued to emanate from Europe, where a festering, two-year debt crisis has begun jolting the region's political landscape. The Dutch government collapsed on Monday, and a new report showed that European government debt is piling up despite severe budget cuts. Separately, a survey of the eurozone's manufacturing and services sectors unexpectedly fell in April to a five-month low of 47.4, down from 49.1 in March. A level below 50 means contraction. "Markets are watching closely and don't like what they see. Things are plainly moving in the wrong direction once again," analysts at DBS Bank Ltd. in Singapore said in a research note. Japan's Nikkei 225 index fell 0.8 per cent to 9,461.99 and South Korea's Kospi dropped 0.7 per cent to 1,959.52. Still, the losses were muted compared to Europe, where political turmoil and disappointing economic data led to steep drops in stocks on Monday. Hong Kong's Hang Seng lost 0.2 per cent at 20,591 after a higher opening. Key benchmarks in mainland China, Indonesia and Taiwan also fell. Those in Singapore and Thailand rose. Australia's S&P/ASX 200 added 0.1 per cent to 4,356.20, with lower-than-expected inflation encouraging traders to wade into stocks. The country's central bank has said it would likely cut interest rates so long as inflation was not a threat. Traders generally view such a step as good for companies. Linus Yip, strategist at First Shanghai Securities in Hong Kong, said investors were staying on the sidelines ahead of a meeting of US Federal Reserve policymakers on Tuesday and Wednesday to discuss the economy and monetary policy. Traders are hoping there might be some show of support for a third round of bond purchases, dubbed quantitative easing III or QE3, to support the U.S. economy. The Fed has already carried out two rounds of bond-buying to drive down long-term interest rates. Low bond yields generally encourage investors to shift money to buying stocks. But the Fed gave no hint of more bond buying at its meeting in March, and Yip said it was "very hard to tell" which way the Fed may be leaning this time. The uncertain outlook hurt share prices far and wide. Hong Kong-listed property giant Evergrande Real Estate Group Ltd. lost 2.6 per cent. Shanghai-listed Fujian Cement Inc. slid 5.3 per cent. Japan's Hitachi Ltd. lost 2.5 per cent and South Korean shipbuilding giant Hyundai Heavy Industries Co. fell 3.4 per cent. But All Nippon Airways jumped 5 per cent after the company revised its operating revenues higher for the year ending March 31, 2012 due to strong demand from tourism, despite sluggish business demand on domestic routes. US stocks suffered Monday from disappointing corporate news. Toy giant Hasbro fell 5.2 per cent after posting a first-quarter loss on falling sales and costs tied to cutting jobs. Netflix, the Internet video subscription service, posted its first quarterly loss in seven years. The Dow Jones industrial average fell 0.8 per cent to close at 12,927.17. The Standard & Poor's 500 index fell 0.8 per cent to 1,366.94. The Nasdaq composite index fell 1 per cent to 2,970.45. Benchmark oil for June delivery was down 15 cents to $102.96 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 77 cents to settle at $103.11 in New York on Monday. In currencies, the euro rose to $1.3155 from $1.3144 late Monday in New York. The dollar fell to 80.88 yen from 81.13 yen.