Europe\'s debt crisis is spreading fears in markets across the world Asian stock markets mostly fell on Monday as dealers worried that Greece\'s debt problems were going to infect other parts of Europe. Markets dropped after a warning at the back end of last week from Moody\'s over Italian banks\' creditworthiness, with the ratings agency saying it was mulling downgrades across the sector.
The renewed fears sent the European common currency down, which had knock-on effects in Tokyo, where companies with heavy exposure to the euro helped pull the market lower.
The Nikkei closed 1.04 percent, or 100.40 points, lower at 9,678.31, Sydney was 1.01 percent down, 1.03 percent, or 46.3 points, to 4,461.8 and Seoul fell 0.98 percent, or 20.52 points, to 2,070.29.
Hong Kong dropped 0.70 percent in the afternoon but Shanghai gained 0.54 percent as dealers looked to domestic news, focusing on positive comments from Premier Wen Jiabao, who said inflation looked tameable this year.
His comments were interpreted as meaning that Beijing may take its foot off the monetary tightening brake.
Investors in much of Asia were spooked by the pessimism in Europe where Moody\'s said it had put the ratings of 16 Italian banks on review for possible downgrade and had changed the outlook to negative from stable for a further 13 banks.
Moody\'s, which put Italy\'s sovereign credit rating on review earlier this month, said the 16 banks were \"sensitive to even a moderate change in the government\'s credit standing and its ability to support the country\'s banks.\"
The agency has raised doubts about the government\'s ability to reduce Italy\'s public deficit and warned of risks to growth.
The new warning sent the spread between Italian and German 10-year bonds to 212 basis points -- the highest since the creation of the euro.
\"We have seen this pattern before of Greece\'s debt problems spilling over into neighboring countries such as Spain and Italy so we still need to be cautious about Europe\'s sovereign debt risk,\" said Yutaka Miura, a senior technical analyst at Mizuho Securities in Tokyo.
News from Europe buffeted the US on Friday, with the Dow Jones Industrial Average tumbling 115.42 points (0.96 percent) to close at 11,934.58.
The concerns sent the euro down against the dollar and yen in Asia on Monday as traders moved out of the single currency in response to the fears over possible contagion.
The euro bought $1.4124 in Tokyo afternoon trade, down from $1.4195 in New York late Friday. It also slipped to 114.03 yen from 114.10.
The dollar firmed to 80.72 yen from 80.34 yen.
\"As has been so often the case recently, eurozone sovereign debt problems knocked investor risk-appetite lower,\" said John Kyriakopoulos, currency strategist at National Australia Bank.
Oil was lower. New York\'s main contract, West Texas Intermediate for delivery in August, fell 88 cents to $90.28 a barrel in the afternoon.
Brent North Sea crude for August declined $1.60 to $103.52, an extension of the $2.13 dip seen Friday.
Prices of crude have been hit by the International Energy Agency\'s move to release emergency reserves move last week to release 60 million barrels make up for lost supplies from Libya and help the global economic recovery.
Gold opened at $1,500.00-$1,501.00 an ounce in Hong Kong, down from its Friday close of $1,518.50-$1,519.50.

In other markets:
-- Taipei closed 0.38 percent down, losing 32.67 points to 8,500.16.
Fubon Financial rose 0.7 percent to Tw$43.15 and Cathay Financial was off 1.3 percent at Tw$42.05. But Taiwan Semiconductor Manufacturing Company fell 1.2 percent to Tw$72.00. Hon Hai shed 1.6 percent to Tw$96.00.
-- Manila fell 0.50 percent, or 2.15 points, to 4,289.29.
Philex Mining lost 2.1 percent to 22.80 pesos and DMCI Holdings shed 0.1 percent to 43.15 pesos but Energy Development gained 0.8 percent to 6.62 pesos and Metropolitan Bank & Trust added 0.9 percent to 69.75.
-- Wellington dropped 0.51 percent, or 17.58 points, to 3,438.08.
Telecom ended down 2.2 percent at NZ$2.455 and Auckland Airport shed 1.1 percent to NZ$2.21. Fletcher Building lost 0.4 percent to NZ$8.64.