Mixed reaction to Greek deadlock

Mixed reaction to Greek deadlock

Asian stocks were mixed today as markets absorbed developments from Greece pointing to its possible exit from the euro common currency.

Japan's Nikkei 225 slipped 0.2% to 8,780.66 while Hong Kong's Hang Seng rose 0.3% to 19,322.07.

Benchmarks in South Korea, Singapore and Taiwan also rose while Australia's fell.

Greece called a new round of elections for June 17 after coalition talks to form a government fell apart.

The president said depositors were pulling hundreds of millions of euros out of banks, weakening the country's strained financial system.

The developments fueled fears that Greece would exit the euro currency and throw global markets into turmoil.

In elections earlier this month, voters punished parties that supported tough austerity measures needed to secure international bailout money.

But analysts at Credit Agricole CIB in Hong Kong said the scheduling of Greek elections suggested "a reduction in near-term uncertainties" that could lead to some relief for volatile markets.

Positive news on the US economy underpinned sentiment in Asia. Construction of homes in April rose 2.6% from March, and US factory production increased 0.6% in April, helped by a gain in auto production.

Still, US stock markets fell on worries over Greece. The Dow closed down 0.3% at 12,598.55. The Standard & Poor's 500 index finished down 0.4% at 1,324.80. The Nasdaq composite index fell 0.7% to 2,874.04.

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