Most Asian stocks lower on Greece debt standoff, China shares tumble on tighter margin finance

Markets Associated Press

Most Asian stock indexes fell Friday as a standoff between Greece and its international creditors threatened to drag into the weekend. Chinese shares led the declines as curbs on using borrowed money to buy stocks take the heat off a market boom.

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KEEPING SCORE: Japan's benchmark Nikkei 225 index lost 0.2 percent to 20,725.47 while South Korea's Kospi gained 0.4 percent to 2,094.30. Hong Kong's Hang Seng dropped 1.7 percent to 26,674.03 and the Shanghai Composite Index in mainland China slumped 6.3 percent to 4,243.80. Australia's S&P/ASX 200 shed 1.5 percent to 5,539.80.

SHANGHAI SLUMP: China's equity markets, which have sizzled over the past year, are sliding as authorities, worried about a bubble move to tighten rules on margin financing, which involves using borrowed money to buy stocks. The Shanghai index, which until a few weeks ago was up 150 percent over the past 12 months, has fallen more than 11 percent this week. The market's drop may also be exacerbated by the herd mentality of retail investors, who play an outsize role in China's markets, or by margin investors being forced to sell off to meet margin calls.

ANALYST INSIGHT: "Tighter margin financing seems to have deflated the Chinese equity run as there was increasing signs of deleveraging," said Bernard Aw of IG Markets in Singapore. He said margin debt fell for a fourth day Thursday on the Shanghai Stock Exchange.

GREEK TALKS: Global investors are watching closely as Greek debt talks go down to the wire. On Thursday, a key meeting of eurozone finance ministers on Greece's rescue package broke up without agreement, intensifying doubts about whether Athens can repay a 1.6 billion euro ($1.8 billion) debt to the International Monetary Fund due Tuesday. A new meeting is tentatively scheduled for Saturday. Creditors will not free up billions in bailout money until there's an agreement on a drastic tax and austerity reform package for the Mediterranean nation.

WALL STREET: The Dow Jones industrial average lost 0.4 percent to 17,890.36 and the Standard & Poor's 500 fell 0.3 percent to 2,102.31. The Nasdaq composite fell 0.2 percent to 5,112.19.

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ENERGY: Benchmark U.S. crude oil rose 12 cents to $59.82 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 57 cents to close at $59.70 a barrel in New York on Thursday. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 33 cents to $63.53 in London.

CURRENCIES: The euro fell to $1.1186 from $1.1205 in the previous trading session. The dollar weakened to 123.39 yen from 123.62 yen.