China leads dive in Asian stock markets as Greece also rattles investors

EnergyAssociated Press

Chinese stocks led a slump in Asian markets on Wednesday as the sell-off in Shanghai intensified and Greece's future in the euro remained highly uncertain.

KEEPING SCORE: China's Shanghai Composite Index tumbled 5.5 percent to 3,521.20 and Hong Kong's Hang Seng dived 5.1 percent to 23,693.95. Japan's Nikkei 225 lost 3.1 percent to 19,737.64 as the yen strengthened on safe haven buying. South Korea's Kospi was down 1.1 percent at 2,016.21. Other regional markets were also down, including Taiwan, Singapore, Australia and the Philippines.

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CHINA SELL-OFF: A slew of official measures to provide support to Chinese stock markets have failed to halt a recent sell-off. The Shanghai benchmark is down more than 30 percent since peaking June 12 after a sizzling yearlong rally. Millions of novice investors piled into the market when it was at its most frothy. Some made big profits but the slump has left many with shares worth less than they paid and hoping for a rebound so they can sell.

ANALYST TAKE: "Greece and China dominate once again, but throw in massive falls in bulk and base metals and you are left with a worrying mix for market participants," Chris Weston, chief market strategist at IG in Melbourne, Australia said in a commentary. "Can the Federal Reserve divert attention away from these issues in today's FOMC minutes? I am skeptical, even though it is actually the most important U.S. economic release," he said. "Still, for traders there are only two games in town and these remain China's equity markets and the Greek negotiations."

GREECE CRISIS: Frustrated European leaders fearing for the future of their common currency gave the Greek prime minister a last-minute chance Tuesday to finally come up with a viable proposal on how to save his country from financial ruin. Overcoming their surprise when Alexis Tsipras failed to present them with a detailed reform blueprint, the leaders reluctantly agreed to a final summit on Sunday. Indebted Greece needs a financial lifeline from its European creditors who have been pressing for more austerity in exchange for bailout funds. Without that it's expected to default, paving the way for its exit from the euro currency.

WALL STREET: U.S. shares rose moderately on domestic factors. The Standard & Poor's 500 rose 12.58 points, or 0.6 percent, to 2,081.34. The Dow Jones industrial average climbed 93.33 points, or 0.5 percent, to 17,776.91. The Nasdaq composite inched up 5.52 points, or 0.1 percent, to 4,997.46.

ENERGY: Benchmark U.S. crude was down 31 cents to $52.01 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to close at $52.33 in New York on Tuesday. Brent crude, the international benchmark, slipped 79 cents to $56.06 a barrel in London.

CURRENCIES: The euro was little changed at $1.1007 from $1.1008 on Tuesday. The dollar fell to 122.86 yen from 122.52 yen.