Asian Stock Markets Tumble on European Debt Woes, United States Unemployment

Asian stock markets followed the U.S. markets lower, with investors selling on news of sovereign debts worries in Europe and rising unemployment figures in the United States.

Concerns about the U.S. economy and the potential spread of debt problems in Europe shook Asian-Pacific stock markets Friday.

The benchmark indexes in Hong Kong and Seoul fell more than three percent, while Tokyo, Singapore and Sydney shares closed down more than two percent.

Hong Kong shares retreated to their lowest point in five months, while the Japanese Nikkei average saw its lowest close in two months.

Investors took a defensive stance and began dumping European-focused bank and retail stocks in Asia.

Some economists say worse lies ahead for Asian stocks in the second quarter of this year as the United States and Europe struggle to maintain their fragile recovery from the global credit crisis.

However, some Asian traders say the region's markets should recover next week as investors seek out over-sold stocks.

Tim Condon, chief economist for the investment bank ING in Singapore, says he expects the Asian selling to end once plans to control the debt crisis in Greece and other European countries are finalized.

"I think that this fiscal crisis will prove short-lived and the recovery in the world economy … it's actually there, I think equity markets will come back. Investors need to get their heads around these things and then I think they will and risk assets will come back," he said.

The shockwaves across Asia came after Wall Street's Dow Jones index tumbled by 2.6 percent Thursday to its lowest level since November.

In China, the Shanghai Composite Index slid by 1.81 percent and the country's Enterprises Index of top locally listed mainland stocks shed 4.08 percent.

Taiwan stocks shed more than four percent - the biggest daily percentage loss in 13 months.

Stock markets in Europe also opened lower Friday. Investors increasingly are worried that Greece and other countries will not be able to reduce their massive deficits.