Asian stocks down amid Greece fears

Most Asian stock markets slumped today amid persistent investor fears that Europe will not be able to come up with a plan to prevent Greece from defaulting on its debts.

Hong Kong’s Hang Seng index plunged 2.3% to 19,003.16, South Korea’s Kospi index fell 1% to 1,822.37, and Australia’s S&P ASX 200 was down 1.7% at 4,078.20.

Benchmarks in Singapore, Taiwan, mainland China, Indonesia and New Zealand were also lower. Japanese financial markets were closed for a national holiday.

European finance ministers meeting in Poland on Friday said they would push back a decision on whether Greece should get its next payment from last year’s €109bn bailout package until next month.

Greece needs the payment to avoid defaulting on its debt, an event which would undermine global economic growth and hurt banks that hold Greek debt.

“The overall picture is very dismal,” said Tey Tze Ming, a trader with Saxo Capital in Singapore. “We see slowing global growth and the eurozone unable to work out its problems.”

Investors will be closely watching a US Federal Reserve meeting later this week. Mr Tey said the Fed is probably to announce some kind of stimulus measure to help spur economic growth.

“We’re betting the Fed will try a last desperate measure, which should be a last shot in the arm for equities,” he said.

Banking shares fell sharply across Asia in the wake of a rogue trading scandal engulfing Swiss banking giant UBS.

Industrial and Commercial Bank of China, the world’s biggest bank by market value, lost 2.7%, Commonwealth Bank of Australia, the nation’s largest lender, lost 1.7%, and Australian institution Westpac Banking Corp fell 2.5%.

Signs of slowing US economic slow and Europe’s debt crisis have boosted the volatility of the Dow Jones industrial average to its highest since the peak of the financial crisis in 2008.

The Dow rose or fell by more than 100 points 16 times in August, a rate equivalent to two out of every three trading days. It swung by more than 400 points for four consecutive days in the middle of the month – a first in its 115-year history. Since hitting a high for the year in April, the Dow has fallen nearly 11%.

The US economy barely grew during the first six months of the year. Consumer confidence fell to its lowest level since April 2009, when the economy was still in a recession. And there was no job growth in August.

At the same time, the Federal Reserve’s latest survey found that the economy grew in all 12 of its regions from mid-July to the end of August. Sales of big-ticket items like cars increased from the same time last year.

Benchmark oil for October delivery was down $1.26 at $86.70 in electronic trading on the New York Mercantile Exchange. Crude dropped $1.44 to settle at $87.96 on Friday.

In London, Brent crude for November delivery was down 50 cents at $111.72 on the ICE Futures exchange.

In currencies, the euro fell to $1.3660 from $1.3791 late on Friday in New York. The dollar was steady at 76.91 yen.