Asia shares mixed as eurozone debt fears return

HONG KONG - Asian markets were mixed while the safe-haven yen edged up Friday following a sell-off on Wall Street and in Europe as fears over eurozone debt resurfaced with a payment crisis at Portugal's biggest listed bank.

News that the parent of Banco Espirito Santo had covered up a $1.8 billion (S$2.24 billion) hole in its accounts fanned worries of a return to the debt crisis that wracked Europe just three years ago.

Tokyo fell 0.34 per cent, or 52.43 points, to 15,164.04 and Seoul eased 0.70 per cent, or 14.10 points, to 1,988.74, while Sydney added 0.41 per cent, or 22.4 points, to close at 5,486.8.

Shanghai put on 0.42 per cent, or 8.62 points, to 2,046.96 while in the afternoon Hong Kong was 0.34 per cent lower.

Bangkok is closed for a public holiday.

US and European shares sank on Thursday as it emerged that Espirito Santo International, the bank's holding firm, had failed to make payments on some short-term debt.

Trading in the bank's shares were suspended in Lisbon Thursday after its shares plummeted 17.24 per cent. 

The crisis comes less than two months after Portugal exited a three-year, $106 billion international bailout which had helped the government avert a default.

It also revived memories of the eurozone sovereign and banking debt crisis of 2011 that saw a number of nations go to the wall. 

"Is this just an isolated event or is it the first chink in the chain to fire contagion fears?" said IG Markets strategist, Evan Lucas, according to Dow Jones Newswires.

"These issues have been simmering and the data has suggested that normal setting in these economies is still a long way off."

 Fears push dealers in yen

On Wall Street the Dow fell 0.42 per cent, the S&P 500 lost 0.41 per cent and Nasdaq shed 0.52 per cent.

Those losses followed a sell-off in Europe, where London, Frankfurt and Paris all saw hefty losses, while shares in Lisbon dived more than four per cent.

Sentiment was already bad in Europe after France and Italy posted weak industrial output data, adding to disappointing figures from Germany and Britain.

The yen benefited from the uncertainty fuelled by the latest crisis.

In late trade the dollar bought 101.27 yen against 101.32 yen in New York, while the euro was at 137.80 yen compared with 137.88 yen. That compares with 101.50 yen and 138.50 yen on Thursday in Asia.

The single currency also fetched $1.3602 against $1.3609 in US trade.

Investors are also looking ahead to the release next week of Chinese growth data hoping for a pick-up in the world's number two economy following some upbeat indicators recently.

On oil markets US benchmark West Texas Intermediate for August delivery eased 21 cents to $102.72 while Brent crude was down 13 cents at $108.54 in afternoon trade.

Gold fetched $1,336.58 an ounce at 0700 GMT compared with $1,341.45 late Thursday.

In other markets:

-Wellington fell 0.53 per cent, or 27.42 points, to 5,100.59, with Air New Zealand off 2.17 per cent at NZ$2.03 and Fletcher Building slipping 0.56 per cent to NZ$8.85.

-Taipei slipped 0.72 per cent, or 69.28 points, to 9,495.84.

-Hon Hai rose 0.46 per cent to Tw$109.0 while smartphone maker HTC fell 1.49 per cent to Tw$132.5.

-Manila closed 0.52 per cent lower, or 36.12 points, at 6,901.09.

-Alliance Global Group eased 3.69 percent to 28.70 pesos while Philippine Long Distance Telephone lost 0.27 percent to 3,000 pesos.