Asian shares hit bear market territory; euro continues slide

Asian shares fell into bear market territory for the year overnight, while commodities and the euro suffered heavy falls on renewed eurozone fears.

The Nikkei closed 1.66% lower at 8,377 while the Shanghai market was 2.11% lower at 2,182 and the Hang Seng fell 1.78% to 18,028.

The MSCI Asia ex Japan is down 20% for 2011 - the rule-of-thumb definition of a bear market - while the Nikkei has lost about 17.5%, Reuters reports.

US indices also lost ground, with the Dow 1.1% lower at 11,823 and the S&P 500 1.13% down at 1,212.

The FTSE 100 closed more than 2% down yesterday but began today’s session in positive territory, up 0.3% to 5,383.

Gold has taken a battering in recent days, extending yesterday's losses of more than 3.5%, its largest one-day decline in almost three months. Spot gold lost another 0.6% to trade at $1,564.89 an ounce this morning.

Meanwhile the euro fell as low as $1.2944, its weakest level since January, although it later stabilised at $1.2985.

Investors are awaiting the outcome of a Spanish bond auction later today. An earlier 5-year Italian debt auction yield of 6.47% marked the highest rate paid by the country since 1997.

A downgrade by ratings agency Fitch of five major European financial groups, including France's Credit Agricole to A-plus from AA-negative, added to the already euro-negative sentiment, Reuters reports.

Earlier this month Standard & Poor’s warned it may make sweeping downgrades of 15 eurozone member countries.