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Asian markets dragged down by selloff in Europe and fears of worsening global economy
BANGKOK (AP) ' Asian stocks fell Tuesday, dragged down by sharp losses in European markets the day before as fears mounted of a worsening global economy.
Oil slid to below $84 a barrel amid expectations that continued weakness in developed economies will crimp demand for crude. The dollar was higher against the euro but lower against the yen.
Japan's Nikkei 225 index dropped 2.1 percent to 8,601.51, with shares of the country's powerhouse export sector skidding lower as fears grow of another U.S. recession. Toshiba Corp. plunged 7 percent and Panasonic Corp. lost 3.1 percent.
Australia's S&P/ASX 200 shed 1.5 percent to 4,080.90 and South Korea's Kospi was down 1.9 percent at 1,751.22.
Hong Kong's Hang Seng was down 0.9 percent at 19,432.32, with property developers hurt by speculation that the Chinese government may further slow investment in construction as it seeks to tamp down inflation and rebalance the economy.
Gold shares were among the few gainers Tuesday, as prices for the precious metal hovered near record highs. Hong Kong-listed Zijin Mining Group, China's largest gold miner, rose 2 percent. Newcrest Mining Ltd., Australia's No. 1 gold miner, rose 0.6 percent.
The declines in Asia come a day after European shares suffered sharp losses. Britain's FTSE 100 closed down 3.6 percent to 5,102.58. Germany's DAX tumbled 5.3 percent to 5,246.18, and France's CAC-40 dived 4.7 percent to 2,999.54.
Wall Street, which was closed Monday due to the Labor Day holiday, was bracing for losses. Dow futures were down 2.5 percent at 10,925 and broader S&P 500 futures fell 2.8 percent to 1,136.80.
Worrisome U.S. employment figures and the possible spread of Europe's sovereign debt crisis from small economies like Greece to major ones like Italy are stoking investor fears. Greece, Ireland and Portugal have already needed to be rescued with loans from the IMF and Europe, but Italy is regarded as too large to bail out.
"People are worrying about the U.S. economy and the worsening situation in Europe, especially Italy and Spain," said Jackson Wong, vice president of Tanrich Securities in Hong Kong. "There are very big concerns in the market that they might not contain the situation in the short term."
A wave of negative sentiment was unleashed Friday, when a government report said the U.S. economy failed to add any new jobs in August. That caused European and Asian stock markets to sink sharply Monday.
The August jobs figure was far below economists' already tepid expectations for 93,000 new U.S. jobs and renewed concerns that the U.S. recovery is not only slowing but actually going into reverse.
U.S. hiring figures for June and July were also revised lower, adding to the gloom. The unemployment crisis has prompted President Barack Obama to schedule a major speech Thursday night to propose steps to stimulate hiring.
Benchmark oil for October delivery was down $2.78 to $83.67 in electronic trading on the New York Mercantile Exchange. Crude last settled at $86.45 on Friday because U.S. markets were closed Monday for the holiday.
In London, Brent crude for October delivery was up 36 cents at $110.44 on the ICE Futures exchange.
In currencies, the euro slid to $1.4054 from $1.4187 in New York late Friday as worries mounted about Greece's ability to meet requirements set by international lenders to stave off a massive default on the country's debts.
The dollar weakened to 76.82 yen from 76.87 yen. Last month, the dollar fell under 76 yen, which was a new post-World War II high for the Japanese currency.