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Summary Worries about Europe's banking woes and debt problems in the US dragged down Asian stocks.
Crude oil hovered near $97 and the dollar strengthened against the euro while falling slightly against the Japanese yen.The results of stress tests on European banks that were released after the close of trading Friday overshadowed the start of this weeks trading in Asia.The results did little to reassure investor confidence in the continents shaky financial sector, revealing that eight of 90 European banks flunked tests aimed at revealing how they would fare in another recession. Another 16 barely passed.Investors are also unsettled by the inability of U.S. politicians to work out a deal to avoid a debt default before a deadline that is just two weeks away.Looking ahead, sovereign debt worries in the U.S. and Europe and a pickup in second-quarter U.S. earnings data are going to compete for traders attention, said Ben Potter, a research analyst at IG Markets in Melbourne, Australia. The only real certainty in the coming days is that there is likely to be volatility as the market grapples with these major issues.Francis Lun, managing director of Lyncean Holdings in Hong Kong, said that market reaction is quite negative to the stress test results. It really shows that it would be a long time before Europe can solve its problem, he said.South Koreas Kospi fell 0.6 percent to 2,131.47 and Australias S&P/ASX 200 was less than 0.1 percent lower at 4,470.The Shanghai Composite Index was down 0.1 percent at 2,817.18 while Hong Kongs Hang Seng edged up 0.2 percent to 21,919.65.Elsewhere, benchmarks in Taiwan and New Zealand fell while those in Singapore and India rose. Markets in Japan were closed Monday for a national holiday.Chinese banks that are listed in Hong Kong fared better than the rest of the market because investors were continuing to be optimistic about the sector after Agricultural Bank of China Ltd. announced last week that it expected first-half profit to rise 45 percent.Agricultural Bank of China rose 3.8 percent, Industrial and Commercial Bank of China rose 1.6 percent and China Construction Bank Corp. rose 1.7 percent.On Wall Street on Friday, stocks avoided having their worst week in nearly a year after a late rally.
