Markets hit by eurozone news

Asian stock markets mostly dropped today despite a sign China's manufacturing downturn has bottomed as the possibility of a credit rating downgrade for Germany added to Europe's debt turmoil.

Global markets slid yesterday as Spain's borrowing costs soared, raising the risk that it will require a financial bailout that Europe probably cannot afford.

Moody's changing the outlook on Germany's credit rating to negative from stable dented faith in Europe's strongest economy and added to pressure on markets.

Better data on China's manufacturing failed to make much of an impression on nervous investors. Preliminary results of HSBC's survey of manufacturers showed the contraction in factory output eased in June.

Japan's Nikkei 225 stock average was down 0.4 % at 8,472.62 and South Korea's Kospi dropped 0.2 % to 1,785.66.

Australia's S&P/ASX 200 fell 0.2 % to 4,121.80. China's Shanghai Composite added 0.1 % to 2,142.82. Benchmarks in Singapore and Indonesia rose.

Hong Kong delayed opening of its markets as a typhoon brought strong winds and heavy rain to the city, shutting down offices and bringing business to a standstill.

In energy trading, benchmark crude for September delivery was up one cent at $88.15 a barrel in electronic trading on the New York Mercantile Exchange.

The contract fell by $3.69, or 4%, to finish yesterday at $88.14 per barrel in New York.