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Asian stock markets lower on Greek default fears
Asian stock markets lower as Greek failure to meet deficit target stirs fear of default
By The Associated Press

BANGKOK (AP) ' Asian stocks extended a sell-off Tuesday, dogged by signs Europe's debt problems are getting grimmer even as officials promised more help for Greece at the epicenter of the crisis.

Japan's Nikkei 225 index fell 1.6 percent to 8,406.33. South Korea's Kospi index plunged 4.9 percent to 1,682.85 after being closed for a holiday Monday, and Hong Kong's Hang Seng fell 0.7 percent to 16,693.23.

Australia's S&P/ASX 200 fell 0.1 percent to 3,892.00. Benchmarks in Singapore, Taiwan and Malaysia were also lower. Markets in mainland China were closed for a holiday.

European markets tumbled Monday after Greece said it wouldn't be able to reduce its budget deficits as much as it had agreed to as part of a deal to receive more emergency loans. Fears have been growing that Greece, despite billions of euros in rescue loans, will eventually have to default on its massive debts.

Officials indicated early Tuesday that Greece will get a loan installment it needs to keep paying its bills, though not as soon as Greece says it needs it.

Markets have responded nervously to headlines out of Europe for weeks, fearful that a Greece default could lead to a lockup in the global financial system, similar to the one triggered by the collapse of Lehman Brothers in September 2008.

A persistently strong yen and signs of a global economic slowdown continued to haunt Japanese export shares. Honda Motor Corp. fell 4.1 percent. Consumer electronics giants Sony Corp. was down 3.1 percent, while Panasonic Corp. lost 2.2 percent. Office equipment maker Canon Inc. slid 3 percent.

Energy shares tumbled on the back of declining oil prices. Japanese energy explorer Inpex Corp. lost 3.5 percent, while Hong Kong-listed China National Offshore Oil Corp. fell 6.1 percent. Energy Resources of Australia Ltd. lost 2.9 percent.

The latest setback in Greece's financial crisis sent major U.S. stock market indexes to lows for the year Monday. The S&P 500 lost 2.9 percent to 1,099.23. The Dow Jones industrial average fell 2.4 percent to 10,655.30. The Nasdaq composite slid 3.3 percent to 2,335.83.

Traders will look for clues as to the state of the world's largest economy later Tuesday, when Federal Reserve chairman Ben Bernanke testifies before the Joint Economic Committee in Washington.

Meanwhile, the price of oil continued its descent. Benchmark crude for November delivery was down 92 cents to $76.69 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.59, or 2 percent, to close Monday at $77.61 per barrel in New York.

In currency trading, the euro rose to $1.3200 from $1.3198 late Monday in New York. The dollar rose to 76.64 yen from 76.52 yen.

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