Asia Stocks Fall as Crisis in Europe and US Heightens

As the euro falls further against the dollar, Asian stocks slip as well. Mounting concerns of a new United States recession and the debt crisis in Europe have resulted in investors selling riskier assets.

Employment data in the US last week revealed that no jobs were created last month, for the first time in nearly a year.

“Even if you take out the effect from the Verizon strike, it is still a lousy number and people are concerned that growth is not there anymore,” Dominic Schnider of Singapore’s UBS Wealth Management said.

In the meantime, Europe now faces numerous political and legal trials which can have a damaging effect on the country’s already struggling economy.

“In this atmosphere, foreign investors are likely to remain risk-adverse and inactive,” explained Mitsushige Akino of Ichiyoshi Investment Management in Tokyo.

Tokyo’s Nikkei share average .N225 dropped 2%, and MSCI’s broadcast index of Asia Pacific shares beyond Japan .MIAPJ0000PUS dropped 2.6%, leaving it more than 17% below April’s high. The sectors hit the hardest were energy and materials.