Asian stocks fall as Europe debt crisis simmers

A man walks past a screen showing the stock price at a bank in Hong Kong Monday, July 23, 2012. Asian stock markets slid Monday as investors fretted about Europe's debt crisis and worries persisted over a slowdown in China. (AP Photo/Kin Cheung)

By Pan Pylas

AP Business Writer / July 23, 2012

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BANGKOK—Asian stock markets mostly dropped Tuesday despite a sign China's manufacturing downturn has bottomed as the possibility of a credit rating downgrade for Germany added to Europe's debt turmoil.

Global markets slid on Monday as Spain's borrowing costs soared, raising the risk that it will require a financial bailout that Europe probably can't afford. Moody's changing the outlook on Germany's credit rating to negative from stable dented faith in Europe's strongest economy and added to pressure on markets.

Better data on China's manufacturing failed to make much of an impression on nervous investors. Preliminary results of HSBC's survey of manufacturers showed the contraction in factory output eased in June.

Japan's Nikkei 225 stock average was down 0.4 percent at 8,472.62 and South Korea's Kospi dropped 0.2 percent to 1,785.66.

Australia's S&P/ASX 200 fell 0.2 percent to 4,121.80. China's Shanghai Composite added 0.1 percent to 2,142.82. Benchmarks in Singapore and Indonesia rose.

Hong Kong delayed opening of its markets as a typhoon brought strong winds and heavy rain to the city, shutting down offices and bringing business to a standstill.

In energy trading, benchmark crude for September delivery was up 1 cent at $88.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell by $3.69, or 4 percent, to finish Monday at $88.14 per barrel in New York.