Global markets fall as Europe reaches stalemate

Asian shares suffered overnight and European indices plunged today as investors fretted over the lack of progress towards solving Europe’s debt crisis.

Fresh protests against Greek austerity cuts provided a bleak backdrop for the ongoing struggle to tackle the crisis, ahead of the G20 summit in Brussels this weekend.

French President Nicolas Sarkozy said Germany and France are divided on how to expand the region's emergency rescue fund.

The Hang Seng saw the steepest fall, dropping 2.37% to 17,876, with Tokyo's Nikkei 225 dropping 0.92% to 8,691 and Sydney's ASX down 1.59% to 4,207.

The MSCI Asia Pacific index also fell 1.2%, heading to its lowest close in over a week. Benchmarks in Singapore, Taiwan, mainland China, and Indonesia also dropped.

Asian banking shares faced some of the biggest hits, with National Bank of Australia losing 1.9%, and South Korea's Shinhan Financial Group tumbling 3.4%. Industrial & Commercial Bank of China, the world's largest bank by market value, fell 1.5%.

In addition, the Federal Reserve's gloomy assessment of the US economy has also unnerved Asian investors. The Fed's Beige Book survey showed companies remain pessimistic on the outlook for the US domestic market.

The Dow Jones closed at 11,505 yesterday, down 0.6%, while the S&P 500 fell 1.3% to 1,209.

Meanwhile London's leading index also opened down this morning at 5,276, a 1.37% drop. France and Germany saw similar falls, with the German Dax dropping 1.57% to 5,821, and the Cac 40 falling to 3,109, down 1.54%.