Banks and real estate companies led the decline in China as new, more restrictive government measures came into effect. However, investors across Asia took the cue from the downtrend on Wall Street on Friday, and signs of crisis in the Euro zone.
“The European debt problem will impact the (pace of) economic recovery. It's not just Greece; all European countries will have to work hard to reduce deficits,” Andrew Teng, Assistant Vice President at Taiwan International Securities, said,
What is more, “It's not just the problem of Greece's debt burdening the euro, but also the lingering fears of wider contagion," said Hideaki Inoue, chief manager of foreign exchange and financial products trading at Mitsubishi Trust and Banking Corporation.
Markets have thus confirmed doubts among Asia investors that the European Union’s € 720 billion fund will not be enough to stop the crisis from spreading.
After dealing a knockout blow to the Greek economy, the crisis could in effect affect other economies in the near future.