Asian markets mostly lower, Europe fear returns

HONG KONG: Asian markets were mostly lower Tuesday, with traders spooked by news that German consumer confidence had hit a 31-month low, wrangling over Greece's budget and uncertainty about Spain.

Tokyo was 0.29 percent higher by the break but Hong Kong was flat, Shanghai lost 0.13 percent, Sydney slipped 0.17 percent and Seoul shed 0.33 percent.

Attention turned from this month's stimulus-boosting measures by the US, European and Japanese central banks to the real economy and global growth worries.

In Germany, the eurozone's main economic engine, the Ifo economic institute's closely watched business climate index dropped to 101.4 points in September from 102.3 in August.

The figure represents the fifth straight monthly fall in the index, which is now at its lowest level since February 2010, and suggests that the region's ongoing debt crisis is increasingly hurting the German economy.

Markets had already been on edge after the leaders of Germany and France clashed on Saturday over plans to monitor Europe's crisis-hit banks.

Also knocking confidence is Spain's prevarication in asking for a bailout, with Prime Minister Mariano Rajoy holding back from making a request as he wants to avoid subjecting the nation to the painful austerity imposed on Greece.

Uncertainty as to whether Madrid will request a sovereign bailout is "highly risky" and potentially more costly than a quick decision either way, European Union Competition Commissioner Joaquin Almunia said Monday.

Greece and its international creditors continue to hold talks over its latest round of budgetary tightening as it looks to secure the latest tranche of bailout cash.