Stocks fall amid European uncertainty

Asia stock markets fell today, as ominous signs emerged that a debt crisis that has been affecting Greece and then Spain is about to erupt elsewhere on the continent.

Investor sentiment was battered by developments, when Italy's borrowing costs rose and Cyprus said it may seek an emergency bailout this week.

Yet another troubling sign came out of Spain, whose 10-year borrowing rate inched up to 6.71% from 6.67%.

That is close to the 7% rate that led Greece, Portugal and Ireland to seek bailouts.

Japan's Nikkei 225 index fell 0.7% to 8,528.51. Hong Kong's Hang Seng dropped 0.8% to 18,877.40 and South Korea's Kospi was nearly flat at 1,858.73.

Moody's, the credit ratings agency, downgraded Spain's government debt three notches late yesterday, placing it one level above junk status. It downgraded Cyprus's debt by two, pushing it deeper into junk rating.

Italy, meanwhile, had setbacks of its own. Its 10-year borrowing rate rose to 6.07% from 6.02%, and the interest rate on its one-year bonds also rose sharply.

Greece will hold elections on Sunday, and voters may endorse a party that wants to cancel the terms of Greece's own bailout. That would almost certainly force Greece to leave the euro currency.