Asian markets fall after U.S., Europe declines

What caused stocks to plunge?

BEIJING World stocks markets were mixed Tuesday, with Asian benchmarks feeling the effects of losses on Wall Street from the day before. European benchmarks were higher as trading sentiment began improving.

The regional heavyweight, Japan's Nikkei 225, dropped 1.9 percent to 11,046.92. Hong Kong's Hang Seng plunged 2.3 percent to 23,148.53 while Australia's S&P/ASX 200 lost 0.5 percent to 4,882.70. The only gainer among major Asian markets was China's Shanghai Composite Index, which added 0.2 percent to 2,433.13.

"Market participants were always likely to look for excuses to sell and the Europe issues have just come at the right time," said strategist Stan Shamu of Australia's IG Markets in a report.

In Europe, France's CAC-40 gained 0.2 percent to 3,667.57 and Germany's DAX added 0.1 percent to 7,645.03. London's FTSE 100 advanced 0.3 percent to 6,266.23.

Elsewhere in Asia, India's Sensex shed 0.3 percent to 19,683.82. Benchmarks in Singapore, Taiwan, Indonesia and Thailand also fell. The Philippines and Malaysia rose.

In the United States, index futures were up marginally after the three major indices on Monday suffered their biggest one-day declines this year. In before-hours trading, the Standard & Poor's 500 futures were up 0.3 percent to 1,497.20 and the Dow Jones industrial average was up 0.2 percent at 13,870.

China's economy is limping out of its deepest slump since the 2008 global crisis but optimism has been tempered by warnings the recovery could be threatened if trade or investment weakens.

A business group, the China Federation of Logistics & Purchasing, said its index of service industry activity rose marginally to 56.2 in January from 56.1 in December. The measure of new orders declined, which "casts doubt on the strength of the recovery in the service sector," said Nomura economist Zhiwei Zhang in a report.

In Hong Kong, Sinopec Corp. plummeted 2.9 percent after the Chinese state-owned oil company, Asia's biggest refiner, said it was raising $3.1 billion through a share placement.

Concern over Europe's debt has eased but an upcoming election in Italy this month and a corruption scandal in Spain have rekindled concerns about their finances. On Monday, the Dow Jones industrial average closed down just under 1 percent.

Benchmark oil for March delivery rose 8 cents to $96.25 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.60 to close at $96.17 per barrel on the Nymex on Monday.

The yen has been falling over the past few weeks as the new government focuses on getting a moribund economy going again. It has asked the Bank of Japan to do more, which might mean expanding the money supply.

In currency markets, the dollar rose to 92.62 yen from 92.38 yen late Monday in New York, while the euro rose to $1.3525 from $1.3520.