TOKYO (AP) - Asian stock markets bounced back Tuesday, recouping some of the previous day's sharp fall, but European indexes widened their losses as investors fretted the debt crisis in Greece could spread to other countries in the region.
TOKYO (AP) — Asian stock markets bounced back Tuesday, recouping some of the previous day's sharp fall, but European indexes widened their losses as investors fretted the debt crisis in Greece could spread to other countries in the region.
France's CAC 40 dipped 0.9 percent to 4,827.71 and Germany's DAX fell 0.8 percent to 10,999.94. Britain's FTSE 100 shed 0.6 percent to 6,581.66. U.S. shares were set to rebound moderately. Dow futures were up 0.2 percent and S&P 500 futures up 0.3 percent.
Investors were concerned that the crisis in cash-strapped Greece could spread to other euro countries that are struggling with high debt and austerity policies or to developing nations in Asia and South America.
A series of events over the weekend has left Greece perilously close to defaulting on its debts. Greek leaders pulled out of talks with creditors that include European nations and the International Monetary Fund and called a referendum that's likely to determine if Greece stays in the euro common currency.
In the vote set for Sunday, the government is urging Greeks to vote against its creditors' proposals, arguing that they are humiliating and that they would prolong the country's financial woes.
"Greece and the outcomes of a rejection of austerity have always been a known unknown, but the timing and sheer defiance from the Greeks have startled markets," said Chris Weston, chief strategist at IG, in a market commentary. "Traders have been smacked into action and a real wake-up call has been provided."
In Asia, Japan's benchmark Nikkei 225 gained 0.6 percent to 20,235.73 after dropping to its lowest point for the year Monday. South Korea's Kospi was up 0.7 percent to 2,074.20. Hong Kong's Hang Seng rose 1.1 percent to 26,250.03. China's Shanghai Composite jumped 5.5 percent to 4,277.22 while Australia's S&P/ASX 200 was up 0.7 percent at 5,459.00.
In currency trading, the euro dropped to $1.1161 from $1.1216 on Monday. The dollar fell to 122.15 yen from 122.62 yen.
"Most traders are well prepped over the possible fallout of Greece. It's guessing which card will fall next that's the difficult bit," said Nicholas Teo, analyst at CMC Markets in Singapore. "The Brazilian real was knocked back hard these past days as have the Turkish lira and most other emerging Asian currencies. These associations are made to Greece as they fall under the labeling of global emerging markets."
Investors fled from stocks worldwide on Monday and retreated to the safety of government bonds.
U.S. stocks had their worst day of the year. The Standard & Poor's 500 index dropped 43.85 points, or 2.1 percent, to 2,057.64. The Dow Jones industrial average lost 350.33 points, or 2 percent, to 17,596.35, and the Nasdaq composite fell 122.04 points, or 2.4 percent, to 4,958.47. The losses wiped out all the gains for the Dow and S&P 500 indexes this year.
Over the weekend, the European Central Bank refused to extend its emergency support for Greece's banking system. That prompted the Greek government to close banks and announce limits on withdrawals. Pictures of long lines at bank machines in Athens appeared on television screens around the world.
In energy markets, benchmark U.S. crude was up 13 cents at $58.45 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.30 to close at $58.33 in Nymex floor trading on Monday. Brent crude, a benchmark for international oils, gained 39 cents at $62.40 a barrel in London.