Asian Stocks Enter Correction; Euro Drops Toward 4-Year Low -

Bloomberg:

May 18 (Bloomberg) -- Asian stocks fell, dragging the MSCI Asia Pacific Index into a so-called correction, on speculation efforts in Europe to curb government debt will curtail growth. The euro fell toward a four-year low ahead of a German report forecast to show investor confidence deteriorated.

The MSCI Asia Pacific Index lost 0.6 percent to 115.97 as of 2:40 p.m. in Tokyo, declining more than 10 percent from its high on April 15 this year. Europe’s single currency weakened to $1.2347 in Tokyo from $1.2395 in New York yesterday. Standard & Poor’s 500 Index futures were little changed after the gauge rebounded from a 1.8 percent plunge to end 0.1 percent higher.

Europe’s finance ministers are struggling to convince investors that budget cuts across the continent won’t tip the region back into recession. The ZEW Center for European Economic Research’s study of German investor sentiment probably fell by the most in 19 months, according to the median forecast of 35 economists in a Bloomberg News survey.

“Near term, markets are going to be weighed down by the pressures in the European Union,” said Rahul Chadha, who manages $1.5 billion in stocks at Mirae Asset Global Investment in Mumbai. “Investors are going to look at more sincere or serious steps by these nations to cut down their deficits.”

Posted via email from Jim Nichols