Asian markets slip, spooked by eurozone fears

HONG KONG: Asian markets slipped Thursday and the euro sat around four-month dollar lows as eurozone fears reared again, with Italy's politicians still unable to form a government weeks after an election.

The dollar also slipped as traders moved into the safety of the yen owing to growing uncertainty over the global outlook.

Tokyo fell 1.09 percent, Hong Kong was 0.98 percent lower, Sydney lost 0.33 percent, Seoul shed 0.13 percent and Shanghai tumbled 2.01 percent.

The losses followed a sell-off in Europe and the United States ahead of the reopening of banks in Cyprus after almost two weeks, under strict capital controls following the weekend's bailout that included a tax on some savings.

"Investors are not worried about Cyprus per se, as it comprises such a small component of Europe's GDP," SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires.

But they are concerned about "the 'contagion effect' of a possible run on banks spreading to other parts of the eurozone," he said.

"It may yet have broader implications for economies there and lead to a longer-lasting 'risk-off' mentality," he added.

In Italy centre-left leader Pier Luigi Bersani struggled to form a coalition after polls in February that saw an anti-austerity party burst on to the political scene, holding the sway of power.

Bersani failed in talks with political parties to form a government after the anti-cuts Five-Star Movement rejected his overtures.