BEIJING: Asian markets fell Tuesday following declines on Wall Street and in Europe amid concern about the political outlook for Spain and Italy.  

Oil prices fell amid jitters about the ability of European governments to keep their finances stable.

The regional heavyweight, Japan's Nikkei 225, dropped 1.3 per cent to 11,116.44. China's Shanghai Composite Index lost 0.6 per cent to 2,413.16 while Hong Kong's Hang Seng tumbled 1.6 per cent to 23,311.01. Australia's S&P/ASX 200 lost 0.4 per cent at 4,890.40.

''Caution will prevail in the near term,'' said Credit Agricole CIB in a report.

Benchmarks in Singapore, Taiwan, Indonesia and Thailand also fell.

In China, the economy is limping out of its deepest slump since the 2008 global crisis but optimism has been tempered by warnings the recovery could be threatened if trade or investment weakens.

A business group, the China Federation of Logistics & Purchasing, said its index of service industry activity rose marginally to 56.2 in January from 56.1 in December.

The measure of new orders declined, which ''casts doubt on the strength of the recovery in the service sector,'' said Nomura economist Zhiwei Zhang in a report.

In Hong Kong, Sinopec Corp. plummeted 3.9 per cent after the Chinese state-owned oil company, Asia's biggest refiner, said it was raising $3.1 billion through a share placement.

Concern over Europe's debt has eased but an upcoming election in Italy this month and a corruption scandal in Spain has rekindled concerns about their finances.

The major European indices – Britain's FTSE 100, Germany's DAX and the CAC-40 in France – all fell Monday. Milan's main index suffered its biggest one-day decline since August.

The jitters ''highlighted what European leaders have been saying for the last few months – that they are not completely out of the woods,'' said market strategist Evan Lucas at Australia's IG Markets in a report.

In the United States, the three major indices suffered their biggest declines so far this year.

The Dow Jones industrial average closed down just under one per cent. The Standard & Poor's 500 index fell 1.2 per cent while the Nasdaq composite index lost 1.5 per cent. That followed a surge Friday that pushed the Dow over 14,000 for the first time since 2007.

Benchmark oil for March delivery fell 17 cents to $96 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.60 to close at $96.17 per barrel on the Nymex on Monday.

The yen has been falling over the past few weeks as the new government focuses on getting a moribund economy going again. As part of that drive it has asked the Bank of Japan to do more and that's probably going to mean an expansion of the money supply.

In currency markets, the dollar fell to 92.34 yen from 92.38 yen late Monday in New York, while the euro fell to $1.3498 from $1.3520.