Hong Kong Stocks Slip As Italy Weighs Down Asia

Hong Kong stocks fell on Tuesday with traders spooked by plunging oil prices and a brewing political crisis in Italy, as they also look ahead to the release of key US jobs data later in the week.

The Hang Seng Index sank 1 percent, to 30,484.

On the mainland, the Shanghai Composite Index gave up 0.5 percent, to 3,120 and the Shenzhen Composite Index slipped 1.1 percent, to 1,786.

Other Asian markets were mostly lower, with traders keeping an eye on oil prices, which have tanked since Saudi Arabia and Russia indicated they could raise output after abiding by a self-imposed cap for two years.

Tokyo ended 0.6 percent lower, while Seoul dropped 0.9 percent while Wellington, Taipei and Manila were also off. However, Sydney added 0.2 percent.

The chaotic developments in Italy have spooked investors, who fear another election could see a better result for the essentially anti-EU parties.

Yields on Italy's key 10-year bonds surged to 235 points above those of benchmark German bunds, its highest level in more than four years, in a sign of falling confidence among investors.

Stock markets in Milan, Paris and Frankfurt tumbled, while the euro sank against the US dollar as the eurozone faced its biggest upheaval since the Greek debt crisis.

In Asian trade the single currency continued to suffer, and was in danger of falling below the US$1.16 level last breached in early November. (AFP)