Asian stocks muted as debt fears loom over Italy

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By PAMELA SAMPSON

BANGKOK (AP) — Asian stock markets struggled to advance Tuesday as worries intensified that Italy could become the next domino to fall in Europe's debt crisis.

Japan's Nikkei 225 index fell 0.2 percent to 8,751.86. South Korea's Kospi was 0.3 percent lower at 1,914.33 while Hong Kong's Hang Seng rose 0.6 percent to 19,787.10. Australia's S&P/ASX 200 was 0.4 percent higher at 4,290.30.

Benchmarks in Singapore, Malaysia and Indonesia were higher. Shares in mainland China were mixed and Taiwan's benchmark was down.

Wall Street finished higher Monday on news that Greece would receive the latest installment of emergency aid as long as the country's two main parties commit to implementing economic reforms agreed to by the country's previous government.

The Dow rose 0.7 percent to close at 12,068.39. The Standard & Poor's 500 index rose 0.6 percent to 1,261.12. The Nasdaq rose 0.3 percent to 2,695.25.

As Greece's economy remained on life support, worries began to surface about Italy, where the prospect of financial disaster was real because of Rome's huge debts and slow growth. Unlike Greece, Ireland and Portugal — the three countries that Europe has already bailed out — Italy's economy could be too large to rescue.

Soaring borrowing rates in the past week have intensified pressure on Premier Silvio Berlusconi to resign.

Investors want the government to quickly pass measures to boost growth and cut debt. But defections from Berlusconi's coalition government mean he no longer commands enough loyalty to pass the reforms.