This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8499699.stm

The article has changed 8 times. There is an RSS feed of changes available.

Version 0 Version 1
Europe debt fears hit Asia stocks Debt concerns hit European shares
(about 4 hours later)
Asian shares have fallen heavily as concerns about government debt levels in some European countries continue to hit global stock markets. European shares have fallen sharply for the second straight day as concerns about government debt levels continue to weigh on investors.
Japan's Nikkei index slumped almost 3%, while stock markets in Hong Kong, Korea and China all fell sharply. In Paris, the Cac 40 index fell 2.5% in morning trading, while in London the FTSE 100 dropped 1.9% and in Frankfurt the Dax lost 1.6%.
On Thursday, the leading US Dow Jones index dropped 2.6%, while key European markets lost more than 2%. Earlier, Japan's Nikkei index slumped almost 3%, while stock markets in Hong Kong, Korea and China all fell sharply.
Debt concerns in Europe were sparked by a lack of demand for government bonds in Portugal. Debt concerns were sparked by a lack of demand for Portuguese government bonds.
This reignited fears that countries such as Portugal and Greece would struggle to fund their national deficits. This reignited fears that countries such as Portugal and Greece would struggle to fund their burgeoning national deficits.
In the US, worse-than-expected weekly levels of unemployment benefit claims also heightened concerns about the strength of the global economic recovery. 'Euro sell-off'
Euro sell-off Greece has outlined ambitions plans to reduce its deficit dramatically over the next two years, but doubts remain about whether its government will be able to deliver such swingeing cuts.
"What we're seeing is a wave of panic selling," said Francis Lun at Fulbright Securities in Hong Kong. The real concern is that the whole recovery is nothing more than poorly-directed government stimulus which has simply had the effect of boosting asset prices David Morrison, GFT
"It's a reaction to crashing European and US markets." "It has been a worry for Greece for weeks, but it is now spreading like wildfire, driving equity markets lower, causing further concerns both about medium-term growth prospects," said Kit Juckes at ECU Group.
The Nikkei fell 298.9 points to 10,057.1, its lowest level since early December. But it is not just stock markets that have been hit.
In Hong Kong, the Hang Seng fell 3.1%, while China's Shanghai Composite index lost 2.4%. "It's been a dismal 24 hours as stock markets, commodities and currencies have fallen around the world, while bond default risk has soared [and] investors have fled risky assets into the relative safety of the dollar," said Michael Hewson at CMC Markets.
European debt fears also hit the euro, which slid a further 4 cents, or 0.3%, against the dollar to $1.3715 after falling more than 1.5 cents on Thursday. As a direct result of the debt concerns, the euro slid a further 5 cents, or 0.3%, against the dollar to $1.3713, after falling more than 1.5 cents on Thursday.
"It's very bad sentiment for the euro, it's a sell-off for the euro definitely," said Lee Sue Ann at United Overseas Bank at Singapore."It's very bad sentiment for the euro, it's a sell-off for the euro definitely," said Lee Sue Ann at United Overseas Bank at Singapore.
Asset bubbles
Concerns over debt levels are also tapping into wider fears about the strength of the global economy, analysts said.
Some investors believe the recovery is the direct result of governments pumping billions of dollars into their economies to stimulate demand.
When they stop pumping money in, they fear, economies will begin to shrink again.
Growing budget deficits mean that governments cannot afford to spend much more on boosting their economies.
"The real concern is that the whole recovery is nothing more than poorly-directed government stimulus which has simply had the effect of boosting asset prices," said David Morrison at GFT.
Investors are now eagerly awaiting US jobless data out later.