ECB ban of Greek bonds hurts Asian stocks

Most Asian stocks were on the red on Thursday in the wake of the European Central Bank's (ECB) decision to lift its waiver on using Greek government debt as collateral for lending to its banks.

ECB said the decision was “based on the fact that it is currently not possible to assume a successful conclusion of the [bailout] programme review”.

The uncertainty surrounding the Eurozone drove Japanese Nikkei 225 to fall 0.98% after rising 2% on Wednesday.

Moreover, China's central bank decision to cut banks' reserve requirement ratio to help lift economic growth was not enough reason to lift Chinese stocks up. Shanghai fell 1.18%.

The People's Bank of China trimmed the ratio requirement by 50 basis points to 19.5%, which came into effect from Thursday.

Fitch Ratings analysts said: “Uncertainty remains as to whether the recent easing measures by the PBOC will actually result in increasing credit to targeted sectors, such as small and micro enterprises.

“If banks utilise the monetary loosening to continue expanding credit in sectors which are already highly leveraged, it would exacerbate vulnerabilities in the system and be credit negative.”

Chinese services PMI data released on Wednesday was shown to have grown at the slowest pace in six month at 51.8 in January, a decline from a 53.4 reading the month before.

On the bright side, Hong Kong’s Hang Seng rose 0.35%, reacting more positively to China’s central bank rate cut decision.