Stocks fall as worries continue

Asian stock markets fell today as a change of government in debt-laden Spain and warnings from Asian officials of a sharp growth slowdown underlined the challenges facing the world economy.

Benchmark crude fell below 98 US dollars per barrel and the dollar slipped against the euro and the yen.

Japan’s Nikkei 225 index fell 0.2% to 8,359.68 and Hong Kong’s Hang Seng was 1.8% lower at 18,152.99.

South Korea’s Kospi dropped 0.6% to 1,827.70. Australia’s S&P/ASX 200 fell 0.2% to 4,167.

Indexes in Singapore, Taiwan and mainland China were also lower.

Market jitters were in evidence a day after Spain voted in a new government - the third time in as many weeks that Europe’s debt crisis has toppled an administration.

Governments in financially troubled Greece and Italy have also fallen.

Spain dumped its ruling Socialist government for the conservative leadership of Mariano Rajoy, who inherits an economy wracked by debt and an unemployment nightmare – which at more than 21% is the highest among the 17 nations that use the euro.

Mr Rajoy also must lower Spain’s soaring borrowing costs with deficit-reducing measures while preventing an already moribund economy from heading into a double-dip recession.

Adding to pessimism, Chinese state media reported Vice Chairman Wang Qishan, who oversees trade and finance, predicting at the weekend that current global economic problems are likely to be long term.

Singapore today warned that its economy will likely suffer a sharp slowdown next year as export demand from developed countries wanes. Because of its high reliance on trade, Singapore is often a bellwether for the rest of Asia.

Japan, meanwhile, said its exports fell for the first time in three months in October, eroded by a strong yen and a sputtering global economy.

Mazda lost 4.4%, Honda fell 2.5%, and Panasonic lost 1.8%. South Korea’s LG Chem Ltd, which makes batteries for electronic cars, lost 3.6%.