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Asian shares fall after optimism fizzles on China, worries loom on Greece
TOKYO (AP) ' Asian shares quickly lost early gains and ended slightly lower Monday morning as optimism over a move by China's central bank to encourage lending were offset by lingering uncertainty about crisis-struck Greece.
Japan's Nikkei 225 index ended morning trading barely changed, down marginally at 8,952.66, erasing an initial surge brought by the China news. South Korea's Kospi also fell, down 0.6 percent at 1,904.74.
In China, investors appeared underwhelmed by the reserve rate cut, following the slew of disappointing data late last week.
The People's Bank of China announced that the bank reserve ratio requirement is being reduced a half percentage point as of next Friday. The move brings the rate down to 20 percent for most major banks and effectively frees up billions of dollars for lending.
The benchmark Shanghai Composite Index slipped 0.4 percent to 2,384.50 while the Shenzhen Composite Index lost 0.3 percent to 957.46.
Real estate and railway contractors rose on expectations more funding may be available for projects, with Hong Kong-listed China Railway Construction Corp. up 1.3 percent.
Investor nervousness remains rampant because of political uncertainty in Greece and a possible fallout to the rest of the region.
Last-ditch efforts by President Karolos Papoulias to broker a deal between wrangling party leaders have so far failed, although more talks to form a coalition are planned for Monday.
The chances of success have been diminished after one leftist party pulled out of the talks, leading the country one step closer to new elections ' and bringing its continued membership in the euro into serious doubt.
Wall Street ended last week with a decline after JPMorgan said it lost $2 billion on poorly-thought-out trades. The Dow Jones industrial average fell 0.3 percent Friday to 12,820.60.
Benchmark oil for June delivery was down 60 cents to $95.53 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 95 cents to settle at $96.13 in New York on Friday.
In currencies, the euro dipped slightly at $1.2887 while the dollar was little changed at 80.03 Japanese yen.
AP Business writers Elaine Kurtenbach in Shanghai and Alex Kennedy in Singapore contributed to this report.
Follow Yuri Kageyama at Twitter at http://twitter.com/yurikageyama
Elaine Kurtenbach at http://www.twitter.com/ekurtenbachsh
Alex Kennedy at http://twitter.com/alexkennedy_ap