Asian markets lower on Europe fears

Asian shares fell Monday as markets awaited details of plans to fix Europe's debt crisis and the outcome of key Sino-US trade talks, with simmering tensions between the economic superpowers.

Tokyo gave up 0.32 per cent, or 26.64 points, to close at 8,348.27 while Sydney ended 0.34 per cent, or 14 points, lower at 4,163. Seoul was down 1.04 per cent, or 19.14 points, at 1,820.03.

Hong Kong was off 1.43 per cent in the afternoon and Shanghai fell 0.36 per cent.

Markets also reacted to news Japan logged an unexpected trade deficit in October, while business hub Singapore predicted sharply lower economic growth next year -- and warned a weaker global economy could worsen the situation.

"It's a brand new week but the same old concerns hover over financial markets," said Tim Waterer, senior foreign exchange dealer at CMC Markets in Sydney.

"Debt debacles on both sides of the Atlantic continue to halt any potential uprising of brighter sentiment from traders."

The European Commission will publish legislative proposals for common eurozone bonds on Wednesday in the latest bid to contain the debt crisis, which has threatened to plunge the world economy into recession.

New rules would see troubled eurozone states effectively club together to guarantee each other's debts and police national budgets to keep the region's fiscal woes in check.

The proposals have been designed to combat nearly two years of regional turmoil after bailouts for Greece, Ireland and Portugal, and with even France now facing mounting pressure going into a presidential election year.

Governments have been deposed by economic turmoil in several nations, with Spain's conservative Popular Party sweeping to victory Sunday in a general election with rising concerns about the country's ability to finance its debts.

International Monetary Fund chief Christine Lagarde warned Sunday that Europe's economic problems, if not addressed, could spread, leading to "major" consequences for the United States, a key trade and business partner which is already fighting to pull itself out of the economic doldrums.

Investors also awaited details of China-US trade talks which started Sunday, with Beijing's currency policy -- and claims it undervalues the yuan -- and market access restrictions expected to top the agenda.

The two countries signed agreements covering areas that include energy cooperation and the trade of high-technology products, but offered no details, Dow Jones Newswires reported.

Wall Street was mixed on Friday with the Dow Jones Industrial Average closing 0.25 per cent higher while the broad-based S&P 500 edged down 0.02 percent and the tech-heavy Nasdaq Composite lost 0.60 percent.

Japan on Monday posted a 273.8 billion yen ($3.6 billion) trade deficit in October, reversing a year-earlier surplus of 812.6 billion yen and confounding economists' expectations.

Also Monday, Singapore said it was now forecasting sharply lower economic growth of 1.0-3.0 per cent in 2012, down from an estimated 5.0 per cent this year amid an export slowdown. The city state's open and trade-dependent economy is considered a bellwether for Asia's exporters.

Markets were also watching deliberations on a US deficit-reduction plan ahead of Wednesday's deadline.

In Sydney, Qantas fell 1.2 per cent after announcing that it had been unable to reach a compromise deal over pay and conditions with pilots and ground crew unions, and would now go to arbitration.

The ongoing row triggered the shock grounding of the carrier's global fleet last month.

On currency markets, the euro fetched $1.3516 and 103.83 yen in early Asian trade, compared with $1.3519 and 104.00 yen in New York late Friday.

The dollar was at 76.81 yen, compared with 76.93 yen in New York and a post-war low of 75.32 yen at the end of last month.

New York's main contract, light sweet crude for delivery in January, fell 27 cents to $97.40 a barrel in the afternoon.

Brent North Sea crude for January delivery gained 10 cents to $107.66.

Gold was trading at $1,719.60 an ounce by 0645 GMT, from $1,720.00 late Friday.

In other markets:

-- Taipei dived 2.64 percent, or 191.14 points, to 7,042.64.

Leading smartphone maker HTC lost 3.48 per cent at Tw$637.0 while Taiwan Semiconductor Manufacturing Co was 1.21 percent lower at Tw$73.3.

-- Manila ended flat, dipping 2.96 points, to 4,299.47.

San Miguel rose 0.7 percent to 126.70 pesos and port operator ICTSI advanced 2.5 percent to 59.45 pesos while SM Investments fell 0.5 percent to 535.50 pesos and Philippine Long Distance Telephone slid 0.3 per cent to 2,370 pesos.

-- Wellington closed 0.17 per cent, or 5.67 points, higher at 3,256.56.

Fisher & Paykel Healthcare rose 0.4 per cent to NZ$2.41 and Telecom added 1.4 per cent to NZ$2.49, while Air New Zealand slipped 0.5 per cent to NZ$1.035.