U.S. Markets closed

Asia stocks mixed after Cyprus vote on bailout

Pamela Sampson, AP Business Writer

Protesters shout slogans during a protest outside of the parliament in Nicosia, Cyprus, Monday, March 18, 2013. A vote on a bailout package for Cyprus that includes an immediate tax on all savings accounts has been postponed until Tuesday evening. Yiannakis Omirou, the speaker of Parliament, said the delay was needed to give the government time to amend the deal reached over the weekend that prompted an outcry from those who thought their money was safe. In order to get euro 10 billion ($13 billion) in bailout loans from international creditors, Cyprus agreed to take a percentage of all deposits — including ordinary citizens' savings — an unprecedented step in Europe's 3 ½-year debt crisis. (AP Photo/Petros Karadjias)

BANGKOK (AP) -- Asian stock markets were mixed Wednesday after Cypriot lawmakers rejected a tax on bank deposits that would have partly funded an emergency bailout to save the Mediterranean country from financial collapse.

The vote in the Cyprus parliament Tuesday rejected a plan cobbled together by international lenders to provide the country with 15.8 billion euros ($20.4 billion) to bail out its heavily indebted banks and shore up government finances.

If it doesn't get the money, the banks could fail, Cyprus' government finances could be ruined for years and the country could face expulsion from the union of 17 countries that use the euro. That's a scenario European policymakers fought to avoid with Greece as its bailouts were negotiated because of fears it would splinter the currency union.

Hong Kong's Hang Seng rose 0.9 percent to 22,234.37. South Korea's Kospi fell 0.4 percent to 1,970.57. Australia's stock market was dragged lower by mining shares. The S&P/ASX 200 fell 0.3 percent to 4,972.50. Benchmarks in Taiwan, Indonesia and Singapore also fell. Mainland Chinese shares and New Zealand rose. Stock markets in Japan were closed for a public holiday.

"The trouble in Cyprus is going to cause risk aversion," said Daniel Martin of Capital Economics in Singapore. "It's a reminder of how precarious things are in Europe. At some point, we're expecting a nasty shock from Europe, probably in the second half of the year."

But strong housing data from the U.S. softened the damage to confidence. Government data showed U.S. builders stepping up construction of homes, while a private report showed the number of Americans with equity in their homes increased last year. That suggests one of the biggest drags from the housing crisis is easing.

Investors will also be monitoring the U.S. Federal Reserve, which ends a two-day policy meeting later Wednesday. The Fed is expected to keep borrowing costs at record low levels despite signs of a strengthening economy. The meeting will end with updated economic forecasts and a policy statement, and Chairman Ben Bernanke will hold a news conference.

Fears over Cyprus have also been contained by the European Central Bank's backstop to euro nations. The ECB said after the vote that it would continue to provide emergency liquidity to Cypriot banks to make sure they do not collapse.

Among individual stocks, Chinese property stocks rose sharply. Hong Kong-listed Evergrande Real Estate Group surged 5.8 percent. Australian mining giants BHP Billiton fell 2.5 percent and Rio Tinto Ltd. shed 2.1 percent.

Stocks were mixed Tuesday after Europe debt woes offset the encouraging housing data. The Dow Jones industrial average rose marginally to 14,455.82. The Standard & Poor's 500 index fell 0.2 percent to 1,548.34. The Nasdaq composite index dropped 0.3 percent to 3,229.10.

Benchmark oil for April delivery was up 20 cents to $92.36 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.58 to finish at $92.16 a barrel on the Nymex on Tuesday.

In currencies, the euro slipped to $1.2872 from $1.2875 late Tuesday in New York. The dollar fell to 95.03 yen from 95.09 yen.


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