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Asia markets hit by Greece crisis Asia markets hit by Greece crisis
(about 1 hour later)
The value of shares has fallen on Asian stock markets amid further signs that the Greek debt crisis is intensifying. Asian stock markets have suffered big falls amid further signs that the Greek debt crisis is intensifying.
Taking their cue from New York, the market in Japan fell almost 3% in early trading, while markets opened nearly 2% down in Australia and South Korea. Shortly before the close, the Tokyo market was down more than 2.6% after falling almost 3% in early trading.
Shares began tumbling after the credit rating agency Standard and Poor's downgraded Greek debt to "junk". Hong Kong's Hang Seng was down 1.3%, while Singapore has seen a 1.5% drop so far.
Global shares have tumbled after the credit rating agency Standard and Poor's downgraded Greek debt to "junk" on Tuesday.
European markets suffered bigger falls on Tuesday, with London's FTSE 100 down 2.6% and France's Cac 40 index falling 3.8%.
On Wall Street, the Dow Jones index fell nearly 2%.
The head of the International Monetary Fund will later urge German MPs to agree to a rescue of the Greek economy.The head of the International Monetary Fund will later urge German MPs to agree to a rescue of the Greek economy.
Dominique Strauss-Kahn will travel to Berlin along with the president of the European Central Bank, Jean-Claude Trichet, to persuade politicians that giving Greece billions of euros in aid is a "last resort".Dominique Strauss-Kahn will travel to Berlin along with the president of the European Central Bank, Jean-Claude Trichet, to persuade politicians that giving Greece billions of euros in aid is a "last resort".
Progress on a deal to bail out Greece may also help to steady investors' nerves.
'No restructure''No restructure'
During a visit to Tokyo on Wednesday, European Council President Herman Van Rompuy announced a meeting of eurozone heads of state and government would be held on 10 May to discuss the Greek crisis.During a visit to Tokyo on Wednesday, European Council President Herman Van Rompuy announced a meeting of eurozone heads of state and government would be held on 10 May to discuss the Greek crisis.
You have to be honest; if not, nobody can help you Angela MerkelGerman Chancellor Your comments You have to be honest; if not, nobody can help you Angela Merkel, German Chancellor Your comments
He insisted negotiations on the aid were "well on track" and that there was "no question about restructuring" Greek debt.He insisted negotiations on the aid were "well on track" and that there was "no question about restructuring" Greek debt.
Meanwhile, Britain's Financial Times newspaper reports that the International Monetary Fund is considering raising its contribution to the bail-out by 10bn euros ($13.3bn; £8.7bn) to 25bn euros. Meanwhile, the Financial Times newspaper in the UK reports that the International Monetary Fund (IMF) is considering raising its contribution to the bail-out by 10bn euros ($13.3bn; £8.7bn) to 25bn euros.
Correspondents say the idea of a bailout is unpopular with the German public, which doubts it will save Greece from going bankrupt. Correspondents say the idea of a bail-out is unpopular with the German public, which doubts it will save Greece from going bankrupt.
The Greek government has acknowledged it can no longer raise money on international markets. The Greek government has acknowledged it can no longer afford to raise money on international markets.
It has urged the European Union and the IMF to release the bail-out package so it can make debt repayments due next month.It has urged the European Union and the IMF to release the bail-out package so it can make debt repayments due next month.
In Greece itself, demonstrators called for the country to default on its debts, so that foreign banks would pay the price for the crisis.In Greece itself, demonstrators called for the country to default on its debts, so that foreign banks would pay the price for the crisis.
On Tuesday, share prices in New York, London, Frankfurt and Paris fell more than 2% after Greece became the first eurozone member to have its debt downgraded to junk. Greece has become the first eurozone member to have its debt downgraded to "junk" status.
When ratings agencies demote a country's credit rating it means they think it is now a riskier place to invest.When ratings agencies demote a country's credit rating it means they think it is now a riskier place to invest.
Some financial institutions have rules prohibiting them from investing in "junk" bonds.Some financial institutions have rules prohibiting them from investing in "junk" bonds.
Portugal's credit was also cut two-notches to A-minus, further fuelling concern that the crisis was about to spread across Europe, forcing a number of countries to default on their debts, hurting the euro, and sparking a new crisis. Portugal's credit rating was also cut by two-notches to A-minus, further fuelling concern that the crisis was about to spread across Europe, forcing a number of countries to default on their debts, hurting the euro, and sparking a new crisis.
'Down to the wire''Down to the wire'
The jitters spread to Asia on Wednesday, with all the region's main stock indices down in early trading. Some investors have expressed concern that the current market jitters could turn into something much bigger.
World markets are not convinced the eurozone will agree a bail-outWorld markets are not convinced the eurozone will agree a bail-out
"We have the makings of a market crisis here," Neil Mackinnon, a global macro strategist at VTB Capital, told the Associated Press new agency. "We have the makings of a market crisis here," Neil Mackinnon, a global macro strategist at VTB Capital, told the Associated Press news agency.
Correspondents say the markets are not convinced that governments in the eurozone will have the political will to reach an agreement on a bail-out for Greece, especially in Germany.Correspondents say the markets are not convinced that governments in the eurozone will have the political will to reach an agreement on a bail-out for Greece, especially in Germany.
On Tuesday, German Chancellor Angela Merkel reiterated that Greece had to first outline further steps to reduce its budget deficit before her government would endorse the release of funds from a 45bn-euro rescue package.On Tuesday, German Chancellor Angela Merkel reiterated that Greece had to first outline further steps to reduce its budget deficit before her government would endorse the release of funds from a 45bn-euro rescue package.
"You have to economise, you have to become fair, you have to be honest; if not, nobody can help you," she warned the Greek people."You have to economise, you have to become fair, you have to be honest; if not, nobody can help you," she warned the Greek people.
Greek Finance Minister George Papaconstantinou said the downgrade of its debt did "not reflect the real state of our economy, nor the fiscal situation, nor the ongoing negotiations which have the very realistic prospects that they will be completed successfully in the next few days".Greek Finance Minister George Papaconstantinou said the downgrade of its debt did "not reflect the real state of our economy, nor the fiscal situation, nor the ongoing negotiations which have the very realistic prospects that they will be completed successfully in the next few days".
"One wishes that Europe had acted a little differently. Three and four months ago we were saying that the mechanism must be ready and it must be detailed, that the markets must know what exactly is going. Unfortunately, for a series of political reasons, we are down to the wire," he added. "One wishes that Europe had acted a little differently. Three and four months ago we were saying that the mechanism must be ready and it must be detailed, that the markets must know what exactly is going.
"Unfortunately, for a series of political reasons, we are down to the wire," he added.