Asia stocks mostly down as ECB takes hard stance on Greek debt

<p>The central bank suspended the use of the country’s debt as collateral for its liquidity operations.</p>

Asian stocks were mostly lower today (February 5th) after the European Central Bank said it would not accept Greek bonds as collateral.

The institution took a tough stance against Athens's efforts to renegotiate bailout terms with creditors.

Global growth worries also weighed on investors' mood. The HSBC Emerging Markets Index fell to 51.2 in January from a three-month high of 51.7 in December, which indicates the weakest expansion in services sector activity in emerging markets in eight months.

Japan's Nikkei N225 dropped one per cent to close at 17,504.62, while the broader Topix index edged down half a per cent. The benchmark S&P/ASX 200 index gained 0.6 per cent to finish at 5,811 and the Kospi average dropped 0.51 per cent to finish at 1,952.84.

The Shanghai Composite closed down 1.18 per cent at 3,136.53, dropping sharply after a rise earlier in the day when the central bank said it would cut the level of reserves banks must hold in a bid to boost bank lending and China's overall economy.

"Although the move by the People's Bank Of China does ease credit and may be beneficial to stimulating demand, it is also a clear sign that growth in China is declining at faster rate than previously thought and as such could have dampening effect on demand throughout the Asia region," Boris Schlossberg, managing director at BK Asset Management, wrote in a note to clients seen by Reuters.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.