Investing.com - Asian stocks moved lower in Wednesday trade, ahead of a European summit scheduled for later in the day where officials hope to agree on a deal to address the regional debt crisis.
During early Asian trade, Hong Kong’s Hang Seng Index lost 1.14% to 18,758.44, Japan’s Nikkei Index fell 0.78% to 8,693.93, while Australia’s S&P/ASX 200 retreated 1.3% to 4,173.30.
The Topix Index of all shares listed on the first section of the Tokyo Stock Exchange, declined 1.21% to trade at 738.64.
Leaders from 27 European countries were scheduled to meet in Brussels later Wednesday, followed by a meeting between heads of the 17-nation euro-zone. Finance officials were to meet at an as-yet undetermined later date to work out the details of whatever scheme is agreed upon.
At the heart of the debate is an expansion of the European Financial Stability Facility, the USD603 billion rescue fund for debt threatened euro-zone nations. France has pressed for additional funding from the European Central Bank while Germany has argued that such an approach would undermine the independence of the ECB.
Merkel said that European officials had discussed two options for leveraging the EFSF, neither of which involved the ECB.
U.S. Treasury Secretary Timothy Geithner warned that failure to extinguish Europe’s debt threat would have a potentially catastrophic effect on the global economy.
“They’re saying a lot of the right things and they’re clearly working on it and they’re moving with a great sense of urgency. That’s all welcome, but until we see what they come together with, it’s a little hard to evaluate,” Geithner told reporters Tuesday.
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In Tuesday trade, Wall Street shares sagged on a disappointing third-quarter earnings report from Amazon.com Inc. The Dow Jones Industrial Average fell 1.74%, the Nasdaq Composite Index surrendered 2.26%, and the S&P 500 gave up 2%.
Earlier in the day, the Conference Board reported that U.S. consumer confidence fell by 6.8 points to 39.8 in October, down from 46.6 in September. Market expectations were for the index to drop by 0.6 points to 46.0 for the period.
Bank and mining issues led decliner in Sydney trade, with National Australia Bank down 0.1%, Macquarie Group Ltd. losing 1.4% and BHP Billiton Ltd. lower by 1.2%.
Australia’s government has proposed a 30% tax on coal and iron ore operations from major producers including BHP Billiton and the Rio Tinto Group.
Japanese exporters suffered in early Tokyo trade, as a surging yen dimmed earnings prospects for firms who must repatriate profits into local currency from overseas markets.
Sony Corp. fell 1%, Toyota Motor Corp. lost 1.3%, auto parts supplier Denso Corp. slumped 2.7% and Toyota Boshuku Corp. declined 1.7%.
The outlook for European stocks was optimistic. France’s CAC 40 futures was higher by 0.10% to 3,151.30, Britain’s FTSE 100 futures added 0.11% to 5,478.40, while Germany’s DAX futures advanced 0.24% to 6,022.80.