Asia stocks slip as Greek bailout remains in limbo

PAMELA SAMPSON AP Business Writer Published:

BANGKOK (AP) -- Asian stock markets dropped Friday after Europe's finance ministers demanded more spending cuts from Greece before clearing a €130 billion ($170 billion) bailout to stave off the country's bankruptcy.

Japan's Nikkei 225 index fell 0.2 percent to 8,984.84. Hong Kong's Hang Seng lost 0.4 percent to 20,928.47 and South Korea's Kospi dropped 0.9 percent to 1,996.18. Australia's S&P/ASX 200 shed 0.5 percent to 4,259.60.

Greece announced an agreement with European debt inspectors Thursday to cut costs and keep from defaulting on its debt next month, an event that would send shockwaves through the world financial system.

But finance ministers from nations that use the euro said Athens didn't go far enough and have given Greece just a few more days to find an extra €325 million ($430 million) of spending cuts and get parliament to approve the measures.

All that suggests "further uncertainty on the horizon," Credit Agricole CIB in Hong Kong wrote in an email. "A Greek parliamentary vote set to begin this weekend may see some progress but markets will trade cautiously ahead of the vote."

The austerity package that failed to satisfy European finance ministers already calls for Greece to make steep new cuts in government jobs and spending. The country's international lenders insisted on the cuts as a condition for a €130 billion emergency bailout that Greece urgently needs to make a bond payment next month.

The cuts will be hard to implement in a country that has grown used to profligate government spending. Protesters have taken to the streets of Athens regularly to denounce the government and its austerity measures.

Australian mining giant Rio Tinto dropped 2.3 percent, a day after reporting a 59 per cent slump in full year profit due to a writedown of its aluminum business. Rival BHP Billiton, which reported weaker-than-expected profits earlier this week, fell 2 percent.

On Wall Street, stocks were helped Thursday by U.S. jobs data. The number of people seeking unemployment assistance fell to its lowest level since April 2008.

The Dow Jones industrial average rose 0.1 percent to 12,890.46. The Standard & Poor's 500 index rose 0.2 percent to 1,351.95. The Nasdaq composite rose 0.4 percent to 2,927.23.

Benchmark oil fell 31 cents to $99.53 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.13 to finish at $99.84 per barrel on the Nymex on Thursday.

In currencies, the euro fell to $1.3276 from $1.3290 late Thursday in New York. The dollar fell to 77.56 yen from 77.66 yen.