World News

Asian Stocks Down as Crude Oil Prices Jump

Asian stocks were down Wednesday after fears of continued political unrest in Egypt and other uncertainties in the global economy drove the price of crude oil to its highest level in months.

Japan's Nikkei 225 index closed down 0.3 percent, while South Korea's Kospi fell 1.6 percent at closing. Hong Kong's Hang Seng was down 1.75 percent and China's Shanghai Composite fell a percent in late trading.

Analysts say investors are concerned that Egyptian unrest could disrupt world supplies of crude oil, the prices of which surged to above $100 a barrel in Asian trading Wednesday.

Egypt's military has given a deadline of 1500 UTC on Wednesday for President Mohamed Morsi to reach a deal with opposition activists, who have staged four days of sometimes violent protests.

While Egypt is not a major oil producer, there is concern that widespread unrest there could threaten operations at the Suez Canal, a key transit point for much of the Middle East's oil supplies.

The global economy has already been hampered by a slow economic recovery in China, the world's second largest economy, and a recession in Europe. Investors are also nervous about what a key U.S. jobs report due out Friday will show.



On Wednesday, a survey showed that growth in China's services sector, an industry of growing important in the country, in June fell to its slowest pace in nine months.

Meanwhile, two debt-ridden European countries -- Portugal and Greece -- are facing new challenges on the austerity programs they agreed to in order to secure international bailouts and avoid bankruptcy.

In Lisbon, the government was near collapse after two key officials resigned in protest of its cost-cutting measures. Foreign Minister Paulo Portas quit Tuesday, the day after Finance Minister Vitor Gaspar left.

And Greece's international creditors are putting new pressure on Athens to meet its pledges to cut government spending before handing over more bailout money.

The lenders are unhappy with the pace of cutbacks in the Greek government workforce and growing deficits on health care spending. Athens missed a June deadline to put more more than 12,000 state workers into a program under which they would be transferred to other jobs or dismissed within a year.

Greece, now in its sixth year of recession and with more than a quarter of its work force unemployed, is seeking release of more than $10 billion from its latest rescue package.

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