Dec. 13 - Asian stocks sink Tuesday, with investors alarmed by the prospect of a mass downgrade of the euro zone's sovereign ratings. Arnold Gay reports.
Asian stocks sank on Tuesday with investors alarmed by the prospect of a mass downgrade of the euro zone's sovereign ratings. Regional markets gave up as much as 1.5 percent, after ratings agency Moody's said it would review the ratings of all EU member states early next year, while Fitch said the EU summit did not provide a "comprehensive" solution to the debt crisis. Legal uncertainty and other issues have clouded the EU's plans for greater budget discipline and fiscal integration. Standard Chartered's Steve Brice says opposition to the plan has already cropped up sooner-than-expected. (SOUNDBITE) (English) CHIEF INVESTMENT STRATEGIST, STANDARD CHARTERED BANK, STEVE BRICE, SAYING: "I think we are still pretty cautious in the short term, the environment out of Europe is very challenging and I think there's negative surprises coming out of there. We've obviously seen the leading candidate in the French presidential election questioning the agreement over the weekend already, that's quicker than normal. You have seen China's stock markets breaking through key support, so I think the overall environment is still pretty defensive. " Investors stayed on the sidelines in Shanghai and HK, awaiting hints of a shift in monetary policy from China's annual economic meeting scheduled for this week. Commodity stocks continued their slide from the previous session, with global miners BHP Billiton and Rio Tinto both shedding more than 2 percent. Banking stocks also lost ground, with the Sydney benchmark shedding 1.4 percent. Intel's revenue warning weighed on Asia's PC makers, with Acer, Compal, and Quanta all lower in Taiwan. South Korean shares joined the regional retreat, with oil stocks like S-Oil and SK Innovation tumbling over four percent, after a fall in crude oil prices overnight. Arnold Gay, Reuters.