Asian markets soft as Europe debt concerns linger

BANGKOK – Sharp losses on Wall Street and fears that Europe's debt crisis might be spreading to larger economies contributed to a mostly soft opening on Asian markets Tuesday.

Japan's Nikkei 225 ended the morning session less than 0.1 percent down at 9,452.53, as the country's powerhouse export sector slumped on a strengthening yen. Hitachi Ltd. and Toyota Motor Corp. were 0.9 percent down, while Sharp Corp. lost 0.7 percent.

Hong Kong's Hang Seng was nearly 0.1 percent down. Shares in mainland China, the Philippines and Taiwan also headed south.

Australia's S&P ASX 200 lost 0.8 percent to 4,605.90, with mining shares hit by worries that a slowdown in Chinese manufacturing would lead to falling demand for commodities by the world's No. 2 economy. BHP Billiton Ltd., the world's largest mining company, dropped 0.4 percent; rival Rio Tinto Ltd. was 0.3 percent down. Energy Resources of Australia Ltd. slid 0.8 percent.

On the upside, South Korea's Kospi rose 0.1 percent to 2,058.31, while Singapore's FTSE Straits Times Index was marginally higher.

Europe's debt crisis shook markets Monday as fears over the solvency of Greece combined with concerns that Spain, or even Italy, may be dragged into the turmoil that has already seen three euro countries bailed out.

On Friday, the Fitch ratings agency downgraded Greece's debt further into junk status, giving investors more reason to fear that the country will need more help managing its debts beyond the emergency loan package it received last year.

Then Standard & Poor's said Saturday that Italy was in danger of having its debt rating lowered if it could not reduce its borrowing and improve economic growth. The next day, Spain's ruling Socialist party was roundly defeated in local elections, potentially jeopardizing the country's deficit-cutting program. Then on Monday, Fitch cut Belgium's outlook.

The turmoil was felt on Wall Street, where stocks took a pounding. Europe's debt crisis sent the euro lower against the greenback, which makes it more expensive for other countries to buy U.S. exports, hurting U.S. companies that sell goods abroad.

The Dow Jones industrial average fell 1.1 percent to close at 12,381.26. The Standard & Poor's 500 index fell or 1.2 percent to 1,317.37 The Nasdaq composite index fell 1.6 percent to 2,758.9.

Benchmark crude for July delivery rose 41 cents to $98.11 per barrel on the New York Mercantile Exchange on Tuesday in Asia. The contract lost $2.40, or 2.4 percent, to settle at $97.70 per barrel on the Nymex on Monday.

The euro sank to $1.4033 from $1.4060 in late trading Monday in New York. The euro had dipped below $1.40 earlier in the day for the first time since March. The dollar slipped to 81.84 yen from 81.97 yen.