In this Dec. 14, 2010 photo, trader Robert Moran, left, check prices as he works on the floor of the New York Stock Exchange. (AP Photo)
BANGKOK (AP) — Asian stock markets fell Monday as Seoul prepared to hold live firing drills that threaten to escalate tensions with North Korea.
South Korea’s Kospi was down 0.3 percent to 2,020.41 after earlier falling as much as 1.5 percent.
South Korea said Monday it would go ahead with the drills from a front-line island despite North Korea’s threat to retaliate. Marines were expected to conduct the one-day artillery drills on Yeonpyeong Island, which was shelled by a North Korean artillery barrage last month.
The North has warned of a “catastrophe” if South Korea goes ahead with the drills.
Korean blue chips lost ground, with LG Electronics Inc. down 1.3 percent.
The geopolitical concerns hurt sentiment across the region.
Japan’s Nikkei 225 index fell 0.8 percent to 10,218.85 and Hong Kong’s Hang Seng index shed 1 percent to 22,490.16.
The Shanghai Composite index dived 2.4 percent to 2,823.83 amid renewed worries the central bank will soon hike interest rates to control rising inflation. Australia’s SP/ASX 200 shed 0.5 percent to 4,741.80.
Benchmarks in Singapore, Taiwan and New Zealand also retreated.
Ongoing worries about Europe’s debt problems weighed on exporter shares in Tokyo as well. Kyocera Corp. fell 1.2 percent, while Ricoh Co. declined 1.4 percent.
Toyota Motor Corp. was off 0.3 percent after the Nikkei financial daily reported that the world’s biggest automaker could face a double-digit decline in Japan sales next year.
In New York Friday, stocks ended flat as investors shrugged off encouraging economic signs and a tax-cut package expected to lift economic growth. The Dow Jones industrial average fell 7.34 points, or 0.1 percent, to close at 11,491.91.
In currencies, the dollar fell to 83.85 yen from 83.96 yen late Friday. The euro fell to $1.3154 from $1.3186.
Benchmark crude for January delivery was down 11 cents at $87.91 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 34 cents to settle at $88.02 on Friday.