Europe debt woes drag down Asian markets

BANGKOK – Asian stock markets were lower Friday as concerns about the possibility of further bailouts for debt-laden European nations and tensions on the Korean peninsula kept buying appetite in check.

Oil prices hovered below $84 a barrel as traders mulled whether economic growth in China will slow and drag down demand for crude. In currencies, the dollar was up against the yen and the euro.

Japan’s Nikkei 225 stock average was down 0.1 percent at 10,075.65 and South Korea’s Kospi fell 0.7 percent to 1,914.87.

Hong Kong’s Hang Seng shed 0.1 percent to 22,877.25 China’s Shanghai Composite Index dropped 0.2 percent to 2,893.243 while Australia’s S&P/ASX 200 added 0.1 percent to 4,596.2.

Markets in Taiwan, Malaysia, Indonesia and New Zealand also fell, while the Singapore benchmark rose.

Analysts said markets remained jittery following a military clash between North and South Korea. Four South Koreans – two marines and two civilians – were killed Tuesday in an hour-long skirmish when North Korea unleashed a hail of artillery against the small island of Yeonpyeong. The island was quiet Friday morning, but fears still lingered.

“Most Asian countries are still hesitating about the situation in Korea, and the markets are hesitant about what might happen,” said Lee Kok Joo, head of research at Phillip Securities in Singapore.

Investors, meanwhile, have come to terms with the prospect of further moves by Beijing to cool inflation and will take further measures in stride, Lee said.

“The Chinese government has been trying to clamp down on asset bubbles for quite some time. The expectation is that the government will implement more measures,” he said. “I think the market perceives that things are still very rosy in China.”

But further afield in Europe, a debt crisis that seemed containable just weeks ago is now escalating, with some experts saying it was only a matter of time before Spain – like Ireland and Greece – would be forced to beg for outside help.

The continent’s troubles have sent the euro lower against the dollar. Ireland on Sunday asked for a massive loan, estimated at 85 billion euros ($115 billion), from the European Union and International Monetary Fund, as Greece did in May.

Asian markets acted without cues from the U.S., where financial markets were closed Thursday for the Thanksgiving holiday.

The downdraft in Asia follows limited gains Thursday in Europe. Key indexes in Britain, Germany and France ended higher but stock exchanges in Ireland, Portugal, Spain and Greece - countries at the forefront of debt crisis - closed lower.

Benchmark oil for January delivery was up 5 cents to $83.91 a barrel in electronic trading on the New York Mercantile Exchange. The contract last settled at $83.86 on Wednesday after gaining $2.61.