HONG KONG — Asian stocks lost ground on Tuesday with Tokyo and Shanghai falling sharply as markets worried about Chinese economic tightening and the troubled eurozone. Tokyo's Nikkei index ended the session down 1.87 percent, or 188.95 points, at 9,937.04, its sharpest decline in seven weeks, while Sydney's S&P/ASX 200 fell 0.74 percent, or 34.2 points, to 4,584.3. Hong Kong's Hang Seng dropped 0.68 percent, or 158.23 points, to 23,007.99, while Shanghai's Composite Index ended down 1.61 percent, or 46.18 points, at a seven-week low of 2,820.18. In one bright spot, South Korean shares ended up 0.48 percent, or 9.09 points, at 1,904.63, reviving after an exchange of fire plunged relations between North and South Korea to new depths last week. The euro slipped to fresh two-month lows in Asian trade, due to scepticism that Ireland's international bailout package can prevent eurozone debt contagion. In afternoon trade the euro stood at 1.3103 dollars, lower than 1.3121 in US markets Monday afternoon, and at 109.98 yen compared with 110.57. The greenback eased to 84.10 yen, from 84.25. Shanghai's plunge came as expectations mounted of an imminent interest rate hike, following a slew of other measures this month to cool the mainland economy and tame inflation -- the latter a political priority for the government. "There have been heightened expectations of an interest rate hike soon, which exacerbated earlier weakness in the index stemming from sovereign debt concerns in Europe as well as a stronger US dollar," Wang Junqing, an analyst from Guosen Securities, told Dow Jones Newswires. Although Tokyo jumped Monday on signs of a strong US shopping season, the mood turned on Tuesday. "Japan is reacting nervously to declines in Chinese markets since China has recently been taking a hardline stance on controlling prices," said Tsuyoshi Segawa, equity strategist at Mizuho Securities. Adding to Japanese jitters, fresh data showed that industrial production fell for the fifth consecutive month in October as stimulus effects waned and slowing global demand hit exports. In addition, unemployment rose unexpectedly to 5.1 percent, the first jobless rise since June. However, a government survey forecast production to rise 1.4 percent in November and 1.5 percent in December. "It's more important that the government expects positive readings in the next two consecutive months," said Taro Saito, senior economist at NLI Research Institute. "The expected figures are rather positive in November and December." The mood was also cautious in Sydney amid expectations of unimpressive third quarter GDP figures on Wednesday. In the United States on Monday the Dow Jones Industrial Average fell 0.36 percent, the broader S&P 500 index lost 0.14 percent and the tech-rich Nasdaq fell 0.37 percent. On oil markets, crude prices were lower as traders took profits from gains the previous day. New York's main contract, light sweet crude for January delivery, dipped 57 cents to 85.16 dollars a barrel and Brent North Sea crude for January slid 49 cents to 86.85 dollars. Gold closed at 1,369.00-1,370.00 US dollars an ounce in Hong Kong, up from Monday's close of 1,366.00-1,367.00. In other markets: -- Manila fell 2.46 percent, or 99.88 points, to 3,953.70. Aboitiz Power inched down 0.5 percent to 32.80 pesos and Alliance Global dropped 3.9 percent to 11.34 pesos. -- Wellington fell 0.18 percent, or 5.88 points, to 3,264.50. -- Taipei was flat at 8,372.48. -- Jakarta fell 2.74 percent, or 99.42 points, to 3,531.21. Thermal coal producer Bumi Resources lost 11 percent to 2,650 rupiah, rival Bukit Asam fell 6.5 percent to 18,700 rupiah, and retailer Midi Utama gained 49 percent to 410 rupiah on debut. -- Singapore fell 0.43 percent, or 13.51 points, to 3,144.70. Oversea-Chinese Banking Corp added 3.12 percent to 9.93 and City Developments gained 3.60 percent to 12.66. -- Kuala Lumpur fell 0.72 percent, or 10.72 points, to 1,485.23. Retail food industry firm QSR slid 5.3 percent to 5.93 ringgit, while cement firm Lafarge Malayan Cement dropped 4.8 percent to 7.52 and national automaker Proton rose 2.9 percent to 4.90. -- Bangkok edged down 0.38 percent or 3.88 points to 1,005.12. Banpu fell 12.00 baht to 760.00 and PTT lost 5.00 baht to 309.00. -- Mumbai closed 0.60 percent, or 116.15 points, higher at 19,521.25. Dealers welcomed data showing the economy grew a forecast-beating 8.9 percent year-on-year in July-September. Property firm DLF rose 7 percent to 307.2 rupees while mobile phone firm Bharti Airtel rose 6.45 percent to 360.4 rupees.

Source