Asian markets slip on new Europe debt fears

HONG KONG: Asian markets fell Monday as Spain's debt troubles added to already downbeat sentiment caused by weak Chinese growth data last week and fading optimism over the US economy.

The euro slipped further as investors became more risk-averse, while the yuan sank against the dollar on the first trading day since Beijing widened the trading band for the Chinese currency.

Tokyo fell 1.45 percent by the break, Hong Kong was 0.58 percent lower, Sydney shed 0.46 percent, Seoul slipped 0.93 percent and Shanghai gave up 0.24 percent.

Regional markets followed losses on Wall Street and in Europe Friday after data showed Spanish banks borrowed a record 227.6 billion euros in emergency cheap loans from the European Central Bank in March.

The figures show the weak confidence in the country's financial sector, with commercial banks turning to the ECB because they are struggling to borrow on the interbank market.

Spain and Italy have come under scrutiny in recent weeks amid fears they could be the next economies to succumb to the same fate as Greece, Ireland and Portugal and need a bailout.

The yield on Spanish 10-year bonds jumped to 5.956 percent on Friday from 5.802 percent on Thursday, while the yield on Italian 10-year bonds rose to 5.513 percent from 5.394 percent.

On Wall Street the Dow dived 1.05 percent, the S&P 500 shed 1.25 percent and the tech-rich Nasdaq fell 1.45 percent.

And in Europe London's FTSE 100 shed 1.03 percent, the Frankfurt DAX dropped 2.36 percent and Paris's CAC 40 fell 2.47 percent. Milan's FTSE Mib index dived 3.43 percent and Madrid shed 3.58 percent. (AFP)