Asian shares down on Cyprus deposit tax

Japan’s Nikkei 225 Stock Average retreated 1.9%, while Australia’s S&P/ASX 200 Index dropped 1.4% in late morning trade.

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by Himanshu Singh on Mar 18, 2013 at 03:55

Asian shares fell on Monday in late morning trade, heading for the biggest decline in a month, amid fears an unprecedented levy on bank deposits in Cyprus will push Europe back into crisis.

The MSCI Asia Pacific I5ndex plunged 1.4% to 135 as of 11:04 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average retreated 1.9%. Australia’s S&P/ASX 200 Index dropped 1.4% and South Korea’s Kospi Index lost 0.4%. Hong Kong’s Hang Seng Index slipped 1.6%, while the Shanghai Composite Index fell 0.4%.

Equities declined after Cypriot President Nicos Anastasiades bowed to demands by euro-area finance ministers to raise €5.8 billion to help fund a bailout by taking a stake in every bank account in the country. Anastasiades postponed a vote on the move in parliament until Monday, a day later than planned, as he seeks more time to convince lawmakers to support him.

In company news, Toyota Motor Corp., the world’s biggest automaker, fell 2.3% as the yen rose against all its major peers.

Esprit Holdings Ltd., a Hong Kong-based clothier that counts Europe as its No. 1 market, fell 1.4%.

BHP Billiton Ltd. lost 2% in Sydney, leading companies lower with earnings closely tied to economic growth.

On the positive side, Panasonic Corp. added 3.5% in Tokyo as the Nikkei newspaper reported the electronics maker may exit the plasma-television market.

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6 comments so far. Why not have your say?

Now if I had cash deposited in a Cyprus bank, I'd withdraw it right now. Watch the TV today as long queues stretch around the block outside every branch on the island. Watch again on Tuesday as the EU 'saves' the Cypriot Banks from overnight disaster....it was ever thus.

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They're cleverer than that Rob! It's a public holiday today in Cyprus so all banks are closed.

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well well lets have another bit of hysterical reporting tut tut sooo predictable and soo over the top. Yeah the market is down 1% big deal it is noyt enough to allow the shorts to recover their losses I am sorry to say. this is an isolated issue which will be forgotten in a weeks time once all the pundits and talking heads have had their say. it is wrong of course but then was n't it Cyprus where all of the greeks who werer too rich to pay taxes stashed their loot? Who nows mya be asil will mmove his money to the uK for HMRC to have a crack at if 1% is all this is going to be well that is just too bad for the doom mongers

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The European debt crisis has not been solved, the can has been kicked down the road.

We have a disconnect between the real economy and stock markets.

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joe

Why would people have forgotten this in a week ?

I think people WILL remember the moral here

-don't put money in the bank

-or, put money in the bank only to use as a deposit to take out the most massive loan you can get your hands on (regardless of whether you can pay it back)

Seems the current EU/UK line is to protect borrowers at all cost and make those who have the money pay. So, people need to play by those rules.

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Drake

Mar 18, 2013 at 10:07

The EU's capacity to cock up bailouts appears to be limitless.

Cyprus will have to introduce emergency legislation this evening to ban withdrawal of funds from banks (and from Cyprus - although isn't exchange control forbidden by EU rules?), which will be even more controversial than the "levy".

It's all very well targetting rich Russians and Greeks, but this move affects Spain and Italy as well.

One bright star in this otherwise cloudy firmament is that I understand some well-known Russians are depositors in Cyprus.

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