Asia stocks lower as Europe pessimism grows

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Asia stocks lower as Europe pessimism grows

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Oil prices hovered below $86 a barrel as investors eyed Europe's debt crisis and a U.S. central.

20 September,2011 10:24 am

Asian stock markets headed lower Tuesday, dented by intensifying worries over Greeces ability to avoid a massive debt default and a credit downgrade slapped on Italy.Oil prices hovered below $86 a barrel as investors eyed Europes debt crisis and a U.S. central bank meeting.Japans Nikkei 225 index fell 1.4 percent to 8,739.74 and Hong Kongs Hang Seng lost 0.1 percent at 18,890.88. Australias S&P/ASX 200 dropped 0.9 percent to 4,043.70. Benchmarks in Singapore, Taiwan and Indonesia also dropped.Bucking the trend was South Koreas Kospi, which was 0.1 percent higher at 1,823.63.Investors remained averse to riskier assets like stocks as talks dragged on between debt-laden Greece and international lending officials.Meanwhile, Standard & Poors downgrade of Italys credit rating Monday added to the pain and fear across eurozone markets, Credit Agricole CIB said in a research note. Italys rating was cut by one notch due to weakening economic growth prospects and higher-than-expected levels of government debt, S&P said.Risk aversion remains highly elevated, with little prospect of a drop any time soon as Italys downgrade adds to Europes woes, Credit Agricole said.Investors are looking to the U.S. Federal Reserve in search of positive news. Many economists expect the Fed, which starts a two-day policy meeting later Tuesday, to announce something to try to jolt the sputtering U.S. economy.Last month, the Fed took the step of endorsing a plan to keep short-term interest rates near zero through mid-2013.