Asia stocks, won, drop on Europe concern

Asian stocks fell for a third day and South Korea's won weakened as concern about Europe's debt crisis weighed on investor confidence. US equity futures gained. The MSCI Asia Pacific Index retreated 0.2 per cent in Tokyo. Standard & Poor's 500 Index futures added 0.2 per cent. The won dropped 0.3 per cent, weakening against all major peers. Japan's five-year note yield fell two and a half basis points to 0.305 per cent, a three-week low. Taiwan's Taiex Index climbed 0.6 per cent after the finance minister said the nation may exempt some foreign investors from a capital-gains tax. Concern about Europe's debt crisis deepened after French borrowing costs increased at an ¤8.44 billion (Dh41.27 billion) auction Thursday amid growing concern that Spain will follow Greece, Portugal and Ireland in requiring an international bailout. "We haven't seen any major improvements in the European debt situation," said Marito Ueda, senior managing director in Tokyo at FX Prime Corp., a currency-margin company. "After Greece, investors may be beginning to shift their focus onto countries like Spain, Portugal and Italy." The Nikkei 225 Stock Average slid 0.7 per cent while South Korea's Kospi index was little changed. The Shanghai Composite Index retreated 0.1 per cent. Markets in Hong Kong, India, Australia, Singapore, Indonesia, Thailand, Philippines, New Zealand and Sri Lanka are closed. Kobe Steel Ltd., Japan's fourth-largest steelmaker, slid 1.5 per cent after doubling its loss forecast for this fiscal year. Taiwan's Taiex snapped a three-day streak of losses. Overseas investors without offices and direct business operations in Taiwan will be exempt "in principle" from a capital-gains tax on stock trades that the government is deliberating, Finance Minister Christina Liu said during a government panel discussion about the tax. The euro was little changed at 107.55 yen. The 17-nation currency lost 2.7 per cent against the yen last week, the most in seven months. Spain, the euro-region's fourth-largest economy, is in "extreme difficulty," Prime Minister Mariano Rajoy said on April 4. From: Gulfnews