Asian
stock markets fell on Monday after European finance heads failed to agree a
plan to solve the region's debt woes, while they also put off a decision on
releasing rescue funds to Greece.
The keenly-watched meeting in Poland on Friday
highlighted divisions between Europe and the United States over the best way
forward for the region, raising fears of another global financial crisis.
Hong Kong fell 2.05 percent, Sydney was 1.81
percent down, Seoul shed 1.03 percent and Shanghai was 1.31 percent lower.
Tokyo was closed for a public holiday.
Eurozone finance ministers said Friday they
would delay until October a decision on eight billion euros ($11 billion) of
bailout cash for Greece, which it cannot tap until has persuaded auditors it is
on track to cut its deficit.
The announcement came despite the United
States warning of "catastrophic risks" to financial markets if the EU
does not quickly contain the crisis, revealing the divisions across the
Atlantic over the best way forward.
Sony Kapoor, head of the Re-define think tank,
told AFP that "the otherwise fractious European Union leaders have united
in their criticism of the markets, the IMF and now (US Treasury Secretary) Tim
Geithner -- for being honest about the scale of problems facing the
eurozone".
Markets are growing concerned that Italy will
follow Greece, Ireland and Portugal in calling for bailout funds to help cope
with its huge debt burden.
Asian markets had rallied before the meeting
on Friday after the European Central Bank and its US, Japanese, Swiss and
British counterparts offered to inject US dollars into lenders squeezed by
Europe's debt crisis.
However Credit Agricole said in a note to
clients: "Any improvement in sentiment following the US dollar liquidity announcement
by various central banks last week is already filtering away against the
background of EU officials' failure to make any headway over the weekend."
The downbeat news from Poland put fresh
downward pressure on the euro Monday, virtually wiping out its strong gains on
the back of the central banks' move.
The single currency was at $1.3663 in early
Asian trade, from $1.3802 late Friday in New York, and at 105.06 yen, from
105.91 yen.
The dollar was at 76.89 yen, compared with
76.82 yen.
Eyes are now on a two-day meeting this week of
the US Federal Reserve's policy setting committee, which is expected to
announce fresh monetary easing measures.
It "is very unlikely that this discussion
ends with no action being taken", DBS Bank said in a market commentary.
New York's main contract, light sweet crude
for delivery in October, fell $1.12 to $86.84 a barrel in morning trade and
Brent North Sea crude for November slipped 81 cents to $111.41 a barrel.
Safe-haven gold fetched $1,825.20 an ounce by
0300 GMT.
By Danny McCord | AFP News
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