Asian stocks were mixed on Friday on fears that debt issues at the holding firms behind Portugal's biggest bank could hurt European periphery markets.
The trouble started when Espirito Santo International (ESI), parent of Portugal's Banco Espirito Santo (BES), delayed coupon payments relating to short-term debt securities, sending BES shares plunging 19 percent. A suspension in the stock of the bank's controlling shareholder, Luxembourg-listed Espirito Santo Financial, due to difficulties with ESI also contributed to worries.
"The question that will come later is: is this an isolated event or is it the first chink in the chain to fire contagion fears. These issues have always been simmering and the data has suggested that normal setting in these economies is still a long way off. However, the fiscal support across the [Europe] region would suggest support will come quickly, but that is unlikely to quell the rush for the exit," said Evan Lucas, market strategist at IG in a note.