Asian stocks extended a global sell-off&nbsp;on Wednesday&nbsp;as Italy's political crisis rippled across financial markets, toppling the euro to a 10-month low, pushing up borrowing costs for Rome and sending investors into safer assets such as US&nbsp;Treasuries.

MSCI's broadest index of&nbsp;Asia-Pacific shares outside Japan tumbled 1.4 per cent, while Japan's Nikkei average sold off 1.5 per cent to a six-week low.

Chinese shares also headed south, with the Shanghai Composite index down 1.4 per cent. South Korea's KOSPI and Australia's S&P/ASX 200 slipped 2.0 per cent and 0.5 per cent, respectively.

Financial spread-betters expected a mixed opening in Europe, with London's FTSE to open 5 points lower at 7,627, Frankfurt's DAX to open 5 points higher at 12,671 and Paris CAC to open down 3 points at 5,435.

The sharp downturn in&nbsp;Asia&nbsp;followed from an equally harsh session on Wall Street&nbsp;on Tuesday, where the Dow Jones Industrial Average fell 1.6 per cent, the S&P 500 lost 1.2 per cent and the Nasdaq Composite dropped 0.5 per cent. The financial sector took the hardest hit.

Investors fear that repeat elections in the euro zone's third-largest economy - which could come as soon as July - may become a de-facto referendum on Italian membership of the currency bloc and its role in the European Union.

"The way Italy's short-term debt yields are spiking makes you think default risk is on the radar in the market. It tells how grave the situation is," said Makoto Noji, senior strategist at SMBC Nikko Securities.

"What the markets are starting to factor-in is not a default per se but an early election leading to a victory of eurosceptics and an exit from the euro."

Short-dated Italian bond yields - a sensitive gauge of political risk - soared 1.5 percentage points from&nbsp;Monday&nbsp;to their highest since 2013 in their biggest move in nearly 26 years.

Safe-haven US&nbsp;Treasury bonds and German bunds rallied, as did the Japanese yen, the US&nbsp;dollar and gold. The euro fell against the Swiss franc, Japanese yen and US&nbsp;dollar, nearing $1.15 and touching its lowest point since July.

US&nbsp;10-year Treasuries were yielding 2.817 per cent in the&nbsp;Asian afternoon, edging up from the U.S. close of 2.768 per cent, while S&P futures rose 0.2 per cent.

Earlier this week, there was talk that a new vote in Italy would not be held until late this year or early 2019, prolonging the uncertainty.

Kerry Craig, a global market analyst at JPMorgan Asset Management, noted that Italy's economy is in better shape that it was in 2011 when the eurozone was mired in a debt crisis.

But, he added, "Completely dismissing the risk that Italy poses would be an unwise move, especially given how the next election may play out and the prospect of a stronger eurosceptic position."

In&nbsp;Asia, traders also fretted over the on-again, off-again US-North Korean summit and the US-China trade relationship.

The United States said&nbsp;on Tuesday&nbsp;that it would continue pursuing actions on trade with China, prompting Chinese state media to slam the U.S. announcement.

Emerging market stocks lost 1.2 per cent, marking a new low point for the year, under continued pressure from a rising US&nbsp;dollar for countries that often borrow in that currency.

Indonesia's central bank is holding an out-of-cycle policy meeting&nbsp;on Wednesday and is expected to raise its benchmark interest rate for the second time&nbsp;in two weeks, according to a Reuters poll.

Oil struggled under pressure from expectations that Saudi Arabia and Russia would pump more oil to counter potential supply shortfalls from Venezuela and Iran, even as US&nbsp;output has surged in recent years.

US&nbsp;crude futures retreated 0.2 per cent to $66.58 per barrel, extending losses into a sixth consecutive sessions.

MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 1.4 per cent

Asian stocks extended a global sell-off on Wednesday as Italy's political crisis rippled across financial markets, toppling the euro to a 10-month low, pushing up borrowing costs for Rome and sending investors into safer assets such as US Treasuries. MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 1.4 per cent, while Japan's Nikkei average sold off 1.5 per cent to a six-week low. Chinese shares also headed south, with the Shanghai Composite index down 1.4 per cent. South Korea's KOSPI and Australia's S&P/ASX 200 slipped 2.0 per cent and 0.5 per cent, respectively. Financial spread-betters expected a mixed opening in Europe, with London's FTSE to open 5 points lower at 7,627, Frankfurt's DAX to open 5 points higher at 12,671 and Paris CAC to open down 3 points at 5,435. The sharp downturn in Asia followed from an equally harsh session on Wall Street on Tuesday, where the Dow Jones Industrial Average fell 1.6 per cent, the S&P 500 lost 1.2 per cent and the Nasdaq Composite dropped 0.5 per cent. The financial sector took the hardest hit. Investors fear that repeat elections in the euro zone's third-largest economy - which could come as soon as July - may become a de-facto referendum on Italian membership of the currency bloc and its role in the European Union. "The way Italy's short-term debt yields are spiking makes you think default risk is on the radar in the market. It tells how grave the situation is," said Makoto Noji, senior strategist at SMBC Nikko Securities. "What the markets are starting to factor-in is not a default per se but an early election leading to a victory of eurosceptics and an exit from the euro." Short-dated Italian bond yields - a sensitive gauge of political risk - soared 1.5 percentage points from Monday to their highest since 2013 in their biggest move in nearly 26 years. Safe-haven US Treasury bonds and German bunds rallied, as did the Japanese yen, the US dollar and gold. The euro fell against the Swiss franc, Japanese yen and US dollar, nearing $1.15 and touching its lowest point since July. US 10-year Treasuries were yielding 2.817 per cent in the Asian afternoon, edging up from the U.S. close of 2.768 per cent, while S&P futures rose 0.2 per cent. Earlier this week, there was talk that a new vote in Italy would not be held until late this year or early 2019, prolonging the uncertainty. Kerry Craig, a global market analyst at JPMorgan Asset Management, noted that Italy's economy is in better shape that it was in 2011 when the eurozone was mired in a debt crisis. But, he added, "Completely dismissing the risk that Italy poses would be an unwise move, especially given how the next election may play out and the prospect of a stronger eurosceptic position." In Asia, traders also fretted over the on-again, off-again US-North Korean summit and the US-China trade relationship. The United States said on Tuesday that it would continue pursuing actions on trade with China, prompting Chinese state media to slam the U.S. announcement. Emerging market stocks lost 1.2 per cent, marking a new low point for the year, under continued pressure from a rising US dollar for countries that often borrow in that currency. Indonesia's central bank is holding an out-of-cycle policy meeting on Wednesday and is expected to raise its benchmark interest rate for the second time in two weeks, according to a Reuters poll. Oil struggled under pressure from expectations that Saudi Arabia and Russia would pump more oil to counter potential supply shortfalls from Venezuela and Iran, even as US output has surged in recent years. US crude futures retreated 0.2 per cent to $66.58 per barrel, extending losses into a sixth consecutive sessions.

Global Markets: Stocks battered as Italian crisis deepens

Eleven Asia-Pacific nations on Thursday are to sign a slimmed-down trade pact to lower tariffs just as US President Donald Trump seeks to raise them after withdrawing from the deal last year.

The Trans-Pacific Partnership, which would have represented 40 per cent of the global economy and nearly one-quarter of its trade, was left for dead after Trump pulled out to pursue his &quot;America First&quot; agenda before the TPP could take effect.

But the revamped deal, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is still a significant achievement that sends a message of openness, its supporters said ahead of the signing ceremony in Santiago, Chile.

The pact will include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, representing together 13.5 per cent of global gross domestic product.

The 11 states form a market of 500 million people, greater than that of the European Union`s single market.

&quot;While taxes are going to be applied to certain products and there is a threat of a trade war, we are going to give a signal of openness,&quot; said Chilean Foreign Minister Heraldo Munoz.

&quot;It`s the most important free trade agreement and the most rigorous that has been signed until now in the world.&quot;

The deal will be finalized in the same week that Trump has risked a global trade war over his decision to introduce tariffs on imported steel and aluminium.

Former president Barack Obama`s administration pushed for the TPP as a counterweight to growing Chinese commercial power. It not only cut tariffs but required members to comply with a high level of regulatory standards in areas like labour law and environmental protection.

Fernando Estenssoro, of Chile`s University of Santiago, says the revamped pact will be &quot;a type of suicide&quot; for the United States. Washington`s absence leaves an open path for China - which remains excluded from the deal - as it negotiates separately with Asian countries and New Zealand.

The CPTPP aims to slash tariffs among the 11 members and foster trade to boost growth.&nbsp;

Felipe Lopeandia, Chile`s top trade negotiator, said the deal will &quot;send a political signal to the world and to the United States itself, that this is a global agreement.&quot;

It is one which remains hugely significant, said Ignacio Bartesaghi of the Catholic University of Uruguay`s business school.

&quot;There is no trade agreement involving that number of countries, and one that has 30 chapters which deal with all the most modern topics of international trade,&quot; Bartesaghi told.

Most provisions of the original agreement remain, except those related to intellectual property originally inserted at the demand of US negotiators.

&quot;The CPTPP will establish a new standard for other regional economic integration agreements, and even for future negotiations in the WTO (World Trade Organization) and in APEC (Asia-Pacific Economic Cooperation),&quot; said Chile`s foreign ministry, which is hosting Thursday`s ceremony.

Chile said membership of the new pact will improve access to markets currently responsible for 17 per cent of its total exports.

Mexico and Peru will also get better entry to countries on the other side of the Pacific.

&quot;It means an increase in our potential market and the possibility that our people can access more products,&quot; said Mario Mongilardi, head of Lima`s chamber of commerce.

The pact will come into force 60 days after it is fully ratified by six of the 11 members.&nbsp;

The 11 states form a market of 500 million people, greater than that of the European Union`s single market

Eleven Asia-Pacific nations on Thursday are to sign a slimmed-down trade pact to lower tariffs just as US President Donald Trump seeks to raise them after withdrawing from the deal last year. The Trans-Pacific Partnership, which would have represented 40 per cent of the global economy and nearly one-quarter of its trade, was left for dead after Trump pulled out to pursue his "America First" agenda before the TPP could take effect. But the revamped deal, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is still a significant achievement that sends a message of openness, its supporters said ahead of the signing ceremony in Santiago, Chile. The pact will include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, representing together 13.5 per cent of global gross domestic product. The 11 states form a market of 500 million people, greater than that of the European Union`s single market. "While taxes are going to be applied to certain products and there is a threat of a trade war, we are going to give a signal of openness," said Chilean Foreign Minister Heraldo Munoz. "It`s the most important free trade agreement and the most rigorous that has been signed until now in the world." The deal will be finalized in the same week that Trump has risked a global trade war over his decision to introduce tariffs on imported steel and aluminium. Former president Barack Obama`s administration pushed for the TPP as a counterweight to growing Chinese commercial power. It not only cut tariffs but required members to comply with a high level of regulatory standards in areas like labour law and environmental protection. Fernando Estenssoro, of Chile`s University of Santiago, says the revamped pact will be "a type of suicide" for the United States. Washington`s absence leaves an open path for China - which remains excluded from the deal - as it negotiates separately with Asian countries and New Zealand. The CPTPP aims to slash tariffs among the 11 members and foster trade to boost growth. Felipe Lopeandia, Chile`s top trade negotiator, said the deal will "send a political signal to the world and to the United States itself, that this is a global agreement." It is one which remains hugely significant, said Ignacio Bartesaghi of the Catholic University of Uruguay`s business school. "There is no trade agreement involving that number of countries, and one that has 30 chapters which deal with all the most modern topics of international trade," Bartesaghi told. Most provisions of the original agreement remain, except those related to intellectual property originally inserted at the demand of US negotiators. "The CPTPP will establish a new standard for other regional economic integration agreements, and even for future negotiations in the WTO (World Trade Organization) and in APEC (Asia-Pacific Economic Cooperation)," said Chile`s foreign ministry, which is hosting Thursday`s ceremony. Chile said membership of the new pact will improve access to markets currently responsible for 17 per cent of its total exports. Mexico and Peru will also get better entry to countries on the other side of the Pacific. "It means an increase in our potential market and the possibility that our people can access more products," said Mario Mongilardi, head of Lima`s chamber of commerce. The pact will come into force 60 days after it is fully ratified by six of the 11 members.

Without US, 11 Asia-Pacific states to sign trade deal

The Asian Development Bank slightly lowered its 2016 growth forecast for developing Asia on Tuesday, reflecting slower-than-expected expansion in India.

Developing Asia, which groups 45 countries in the Asia-Pacific region, is now expected to expand 5.6 per cent this year, rather than 5.7 per cent, the ADB said in a supplement to its Asian Development Outlook 2016.

The ADB trimmed its 2016 growth estimate for India to 7.0 per cent from 7.4 per cent due to weak investment, agricultural slowdown and the government&#39;s recent demonetisation.

But India&#39;s growth forecast for 2017 was kept at 7.8 per cent.

The Manila-based lender kept China&#39;s growth forecasts for this year and next at 6.6 per cent and 6.4 per cent, respectively.

&quot;Asian economies continue their robust expansion in the face of global economic uncertainties,&quot; said ADB deputy chief economist Juzhong Zhuang.

&quot;Structural reforms to boost productivity, improve investment climate, and support domestic demand can help maintain growth momentum,&quot; said Zhuang.

The growth estimate for Southeast Asia was kept at 4.5 per cent for this year and 4.6 per cent in 2017, supported by strong growth in Malaysia and the Philippines.

Economies in South Asia are projected to expand by 6.6 per cent in 2016, down from the previous estimate of 6.9 per cent. For next year, growth in that region will bounce back to 7.3 per cent, the ADB said.

(Reuters)

The forecast was lowered due to weak investment, agricultural slowdown and the government's recent demonetisation

The Asian Development Bank slightly lowered its 2016 growth forecast for developing Asia on Tuesday, reflecting slower-than-expected expansion in India. Developing Asia, which groups 45 countries in the Asia-Pacific region, is now expected to expand 5.6 per cent this year, rather than 5.7 per cent, the ADB said in a supplement to its Asian Development Outlook 2016. The ADB trimmed its 2016 growth estimate for India to 7.0 per cent from 7.4 per cent due to weak investment, agricultural slowdown and the government's recent demonetisation. But India's growth forecast for 2017 was kept at 7.8 per cent. The Manila-based lender kept China's growth forecasts for this year and next at 6.6 per cent and 6.4 per cent, respectively. "Asian economies continue their robust expansion in the face of global economic uncertainties," said ADB deputy chief economist Juzhong Zhuang. "Structural reforms to boost productivity, improve investment climate, and support domestic demand can help maintain growth momentum," said Zhuang. The growth estimate for Southeast Asia was kept at 4.5 per cent for this year and 4.6 per cent in 2017, supported by strong growth in Malaysia and the Philippines. Economies in South Asia are projected to expand by 6.6 per cent in 2016, down from the previous estimate of 6.9 per cent. For next year, growth in that region will bounce back to 7.3 per cent, the ADB said. (Reuters)

Asian Development Bank trims India 2016 growth forecast to 7%

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Global Markets: Stocks battered as Italian crisis deepens

Without US, 11 Asia-Pacific states to sign trade deal

Asian Development Bank trims India 2016 growth forecast to 7%