HONG KONG: Shares fell in Asia on Monday as worries over Europe's debt crisis were brought sharply into focus by the arrest of IMF chief Dominique Strauss-Kahn.
A lacklustre performance from Wall Street on Friday was compounded by the bombshell arrest of the managing director of the International Monetary Fund by police in New York on charges that he sexually assaulted a hotel chambermaid.
Tokyo closed down 0.94 percent, losing 90.47 points to stand at 9,558.30. Sydney slumped 1.30 percent, or 61.4 points, to a two-month-low 4,650.00, and Seoul closed 0.75 percent, or 15.9 points, lower at 2,104.18.
Hong Kong finished 1.36 percent, or 315.64 points, lower at 22,960.63 and Shanghai was off 0.76 percent, or 21.96 points, at 2,849.07.
Market players said the re-emergence of eurozone debt worries after weekend comments by German Finance Minister Wolfgang Schaeuble had dampened sentiment.
"It seems that risk aversion will remain elevated over the short-term until there is a resolution of various periphery worries in Europe," Credit Agricole said in a note to clients.
Schaeuble said Sunday cash-strapped Greece could be granted an extension to its debt repayment if private creditors are also involved.
Greece's 110-billion-euro ($155 billion) rescue in spring 2010 was the first of three European bailouts, followed by Ireland and Portugal, but a severe recession has complicated Athens' efforts to get its finances back in order.
The mood had been set by Friday's finish in the US, where the Dow Jones Industrial Average dropped a hefty 100.17 points (0.79 percent) to finish at 12,595.75, while the broader S&P 500 index slid 10.88 points (0.81 percent) to 1,337.77.
Worries over the eurozone's debt-ridden economies were further complicated by the arrest in the US of globe-trotting IMF boss Strauss-Kahn.
"The arrest of the IMF chief over the sexual assault charge in New York City makes the aid to Greece quite uncertain," said Victor Shum, senior principal of Purvin and Gertz international energy consultants in Singapore.
The global financial watchdog is leading the efforts to help the precariously balanced eurozone economies, and the arrest forced the IMF executive board to postpone a meeting on an IMF-backed bailout for Portugal.
Strauss-Kahn, whose stint at the IMF does not officially end until September 2012, had been due to meet with German Chancellor Angela Merkel in Berlin on Sunday to discuss an aid package for Greece.
On the currency markets, the euro was buffeted by the arrest.
The single European unit fell half a cent in opening Asian trade to $1.4056, down from $1.4108 in New York late Friday, but recovered to $1.4126 as investors moved to lock in profits from earlier losses.
The single European currency rose to 114.14 yen, compared to 113.99 yen in late New York trade. The dollar rose to 80.82 yen from 80.71 yen.
"For a few days at least, the market will likely suspect leadership paralysis at the IMF. Again, the euro has most to lose from this, given the IMF is now active or becoming active in three eurozone countries (including Ireland)." Gareth Berry, currency strategist at UBS, told Dow Jones Newswires.
The rise of the dollar hit oil, which is priced in the US currency and becomes relatively more expensive in tandem with the greenback.
In Asian afternoon trade New York's main contract, light sweet crude for delivery in June, fell $1.26 to $98.39 per barrel, and Brent North Sea crude for June delivery shed 97 cents to $112.86.
Gold closed in Hong Kong at $1,496.00-$1,497.00 per ounce, down from its Friday close of $1,514.00-$1,515.00.
In other markets:
-- Manila bucked the regional trend to close 0.20 percent higher on heavy buying of key blue chips.
The composite index rose 8.70 points to 4,300.81.
Lepanto Consolidated Mining 'A' shares rose by 1.23 percent to 82 centavos while Universal Robina Corp. gained 5.69 percent to 41.80 pesos.
-- In Wellington, the NZX-50 closed up 8.1 points or 0.23 percent to 3,543.87 on gains in market leaders Fletcher Building and Telecom Corp.
Telecom rose 1.7 percent to NZ$2.34, while Fletcher lifted 1.0 percent to NZ$9.01.
-- Indonesian shares lost 32.80 points or 0.86 percent to 3,799.23 in moderate trade.
Coal producer Bumi Resources fell 1.4 percent to Rp3,475, BCA slid 2.7 percent to Rp7,100, while tin producer Timah slipped 2.8 percent to Rp 2,625.
-- Kuala Lumpur ended down 0.29 percent or 4.47 points to close at 1,536.27.
Gaming giant vGenting slid 2.5 percent to 11.12 ringgit as budget carrier AirAsia slipped 2.9 percent to 3.03, while tobacco firm JT International climbed 1.3 percent to 7.25 ringgit.
-- Singapore closed 0.86 percent, or 27.2 points, lower at 3,136.48.
Banking giant DBS lost 1.90 percent to Sg$14.48 and Singapore Airlines dipped 0.82 percent to Sg$14.54.
-- Taipei's weighted index fell 94.90 points, or 1.05 percent, to 8,911.71.
Taiwan Semiconductor Manufacturing Co was off 1.32 percent at Tw$74.9 while leading smartphone maker HTC lost 3.33 percent at Tw$1,160.
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