DHAKA: Fears that Europe’s debt crisis is morphing from Greece to engulf bigger economies such as Spain and Italy sent Asian stock markets lower Thursday.
Spain’s banking system is under strain a week after Bankia, the fourth-largest bank, required $23.8 billion in government aid to cover souring real estate loans.
Investors are increasingly worried that problems might surface at other Spanish banks.
Many lent heavily during the nation`s real estate bubble and losses from the real estate crash might be too big for Spain`s government to shoulder.
Another negative signal came from the European Central Bank, which said Spaniards pulled billions in deposits out of their banks last month, raising concerns of a larger bank run.
On Wednesday, borrowing rates rose sharply for Spain and Italy, a sign that investors are increasingly uneasy about their ability to pay off their debt.
Japan’s Nikkei 225 index tumbled 1.9 percent, also hit by a stronger yen which erodes the profits of the country’s exporters.
Mazda Motor Corp. plunged 5.8 percent and Canon Inc. fell 4.4 percent.
Hong Kong’s Hang Seng lost 1.4 percent to 18,423.61 and South Korea’s Kospi was down 1.3 percent at 1,821.32.
Australia’s S&P/ASX 200 shed 1.1 percent to 4,051.
Benchmarks in Singapore, Taiwan, mainland China, Indonesia and the Philippines also fell, report agencies.
BDST: 1924 HRS, MAY 31, 2012
Edited by Robab Rosan, Cultural Affairs Editor
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