Updated :
Wednesday May 16 , 2012 12:06:11 PM
Asian shares slid and the dollar rose broadly on Wednesday after efforts to form a new government in Greece collapsed, fuelling fears that a second election in June could precipitate Athens' exit from the euro zone and deepen the bloc's debt crisis.
European shares were expected to extend losses as well, with financial spreadbetters predicting that major European markets would open down as much as 1 pecent. U.S. stock futures were down 0.2 percent.
Investors continued to reduce positions in riskier assets, leading to a fall of more than $1 in oil prices and a drop to a 4-month low for spot gold, while lifting the dollar which tends to be seen as safe haven in times of heightened uncertainty.
MSCI's broadest index of Asia-Pacific shares outside Japan extended losses for the fourth consecutive day, sliding nearly 3 percent to a new 4-month low, and was set for its biggest one-day loss in six months. The index has fallen more than 9 percent since May 2.
"It's part of the risk-on, risk-off trade that we've had for the past two years and we are still stuck in it, looking for the next catalyst," said Andrew Pease, Sydney-based chief investment strategist at Russell Investments Asia Pacific, adding that markets may be risking becoming too pessimistic again.
"The U.S. isn't great but doing OK, Europe is still in a mess and markets have been downgrading their views on China, and all these are feeding into an extended risk off period after a strong risk-on March quarter. As an asset manager, it's not a time to have a strongly-held views right now," Pease said.
The materials and energy sectors were among the biggest decliners in MSCI's pan-Asian index, hitting resources-heavy Australian shares which slipped 2.3 percent.
But the technology sector was the biggest loser and pulled South Korean shares down to a 4-month low, after traders cited a report that Apple Inc (AAPL.O) could be shifting orders for memory chips to Japan.
In addition to Greek jitters, financials pulled Hong Kong shares down more than 2.5 percent to a four-month low after a mainland newspaper reported flat loan growth for the first two weeks of May by the country's "Big Four" state-owned banks, adding to concerns about an economic slowdown following weak data last week.
Japan's Nikkei average shed 1.5 percent to a four-month low.
Asian shares slid and the dollar rose broadly on Wednesday after efforts to form a new government in Greece collapsed, fuelling fears that a second election in June could precipitate Athens' exit from the euro zone and deepen the bloc's debt crisis.
European shares were expected to extend losses as well, with financial spreadbetters predicting that major European markets would open down as much as 1 pecent. U.S. stock futures were down 0.2 percent.
Investors continued to reduce positions in riskier assets, leading to a fall of more than $1 in oil prices and a drop to a 4-month low for spot gold, while lifting the dollar which tends to be seen as safe haven in times of heightened uncertainty.
MSCI's broadest index of Asia-Pacific shares outside Japan extended losses for the fourth consecutive day, sliding nearly 3 percent to a new 4-month low, and was set for its biggest one-day loss in six months. The index has fallen more than 9 percent since May 2.
"It's part of the risk-on, risk-off trade that we've had for the past two years and we are still stuck in it, looking for the next catalyst," said Andrew Pease, Sydney-based chief investment strategist at Russell Investments Asia Pacific, adding that markets may be risking becoming too pessimistic again.
"The U.S. isn't great but doing OK, Europe is still in a mess and markets have been downgrading their views on China, and all these are feeding into an extended risk off period after a strong risk-on March quarter. As an asset manager, it's not a time to have a strongly-held views right now," Pease said.
The materials and energy sectors were among the biggest decliners in MSCI's pan-Asian index, hitting resources-heavy Australian shares which slipped 2.3 percent.
But the technology sector was the biggest loser and pulled South Korean shares down to a 4-month low, after traders cited a report that Apple Inc (AAPL.O) could be shifting orders for memory chips to Japan.
In addition to Greek jitters, financials pulled Hong Kong shares down more than 2.5 percent to a four-month low after a mainland newspaper reported flat loan growth for the first two weeks of May by the country's "Big Four" state-owned banks, adding to concerns about an economic slowdown following weak data last week.
Japan's Nikkei average shed 1.5 percent to a four-month low.
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