BANGKOK (AP) — Asian markets dropped Monday amid fears of a spreading European debt crisis after a ratings agency placed Italian banks on a review for a possible downgrade.
Oil prices fell below $91 a barrel as a stronger U.S. dollar made crude more expensive for investors with other currencies. The greenback was higher against the euro and the yen on safe-haven buying.
Japan's Nikkei 225 fell 0.7 percent to 9,609.64, South Korea's Kospi lost 1 percent to 2,069.61, and Hong Kong's Hang Seng slipped 0.7 percent to 22,025.35, amid worries over whether debt-drenched Greece would be able to enact a slew of harsh austerity measures in order to receive a chunk of its multibillion euro bailout.
If those measures fail to win parliamentary approval, the country would be at serious risk of defaulting on its debts, a prospect that could unleash financial shocks globally.
Tey Tze Ming, a trader at Saxo Capital Markets in Singapore, said the European debt crisis — if it blows up and spreads beyond Greece to a major economy like Spain — would be felt very keenly by Asian economies that are heavily dependent on exporting to Western Europe.
"In the short term, I think stocks in Asia are going to be in for a bit more pain. I think there's a lot more downside," Ming said.
Technology shares followed their U.S. counterparts lower. South Korea's Hynix Semiconductor, one of the world's leading computer chip makers, was 4.7 percent down. Japanese chipmaker Elpida Memory slipped 1.7 percent, and Taiwan Semiconductor Manufacturing lost 1.4 percent.
But tumbling oil prices, which translate into lower fuel costs, helped sustain airline shares. Air China Ltd. rose 5.3 percent in Hong Kong. Taiwan's EVA Airways Corp. was 1 percent higher. Korean Air Lines Co. rose 0.4 percent.
Australia's ASX/S&P 200 lost 1.1 percent to 4,457 amid a banking sector slip. Commonwealth Bank of Australia, the country's largest lender, dropped 1.3 percent, while Westpac Banking Corp., which ranks No. 2, lost 0.4 percent.
Benchmarks in Singapore, Indonesia and Taiwan were also lower, while mainland China's Shanghai Composite Index gained 0.4 percent to 2,757.31.
Meanwhile, Italian banks were down sharply Friday on the Milan stock exchange after ratings agency Moody's said it was considering downgrading their credit worthiness.
Moody's Investors Service placed the long-term debt and deposit ratings of 16 Italian banks and two Italian government-related financial institutions on review for a possible downgrade.
On Wall Street, stocks fell Friday after poor earnings reports from two major technology companies suggested that companies invested less in new technology as the economic recovery slowed.
The Dow Jones industrial average fell 1 percent to 11,934.58. The Standard & Poor's 500 index fell 1.2 percent to 1,268.45. The Nasdaq composite fell 1.3 percent to 2,652.89.
The U.S. economy has cooled since late April. Recent reports on housing, employment, manufacturing and retail sales all have been weak. The debt crisis in Greece and fears that China's growth is slowing have also pushed markets lower.
In energy trading, benchmark oil for August delivery was down 81 cents to $90.39 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose 14 cents to settle at $91.16 on Friday.
In currencies, the euro weakened $1.4125 from $1.4171 on Friday in New York. The dollar ticked up to 80.75 yen from 80.52 yen.