BANGKOK – Asian markets fell sharply Tuesday as traders dumped shares following steep drops on Wall Street amid concerns that political unrest in Iran and Libya could send oil prices soaring and paralyze the global economic recovery.
Oil prices rose to more than $100 a barrel, and the dollar strengthened against the yen and the euro.
Japan's Nikkei 225 stock average was down 2.2 percent to 10,513.37 while South Korea's Kospi slipped 0.7 percent to 1,926.02. Hong Kong's Hang Seng index was down 1.7 percent to 23,007.29.
Investor sentiment wilted over higher fuel prices and their effect on the global economy, as unrest in oil-producing countries continued. Iran clamped down on anti-government protesters and forces loyal to Libya's leader Moammar Gadhafi launched counterattacks against rebels expanding control over the country.
Fears that the unrest might spread to Saudi Arabia, the world's largest oil exporter, is keeping many investors on the sidelines, said Matthew Lewis, head of sales trading in Sydney at CMC markets.
"The trigger, I think, is that the Libyan crisis looks like it is not going to go away as easily as it did in Egypt. Iran is showing a little bit of unrest," he said. "There is growing concern that Saudi Arabia is in the middle of that. What would happen to oil prices if there were civil unrest in Saudi Arabia?"
Australia's S&P/ASX 200 was off 0.6 percent to 4,797.80. The Australian economy grew 0.7 percent in the final quarter of 2010, according to official figures released Tuesday. That met expectations and didn't have much impact on the market, said Lewis.
Shares in New Zealand, mainland China, Taiwan and Singapore were also lower. Indian markets are closed Wednesday for the holiday of Mahashivratri.
In Tokyo, fears of a further global slowdown weighed on exporters like major electronics and car manufacturers. Toshiba Corp. was down 2.2 percent and Sony Corp. lost 2 percent. Toyota Motor Corp. was 2.5 percent lower.
Sharp Corp. dropped 4.6 percent after Morgan Stanley cut its rating in a report that went out early Wednesday, citing concerns over its LCD panel business.
Airline shares also fell on concerns over fuel prices. Qantas Airways Ltd. dipped 2.1 percent, while Cathay Pacific Airways Ltd. lost 2.3 percent. China Southern Airlines Co. Ltd. was down 4 percent and All Nippon Airways Co. Ltd. lost 2.7 percent.
The falls came after big drops in the U.S., where the Dow Jones industrial average lost 1.4 percent to 12,058.02, and the broader Standard & Poor's 500 index fell 1.6 percent to 1,306.33.
Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee that a sustained increase in crude prices could pose a risk to the U.S. economic recovery. Also in the U.S., the Commerce Department said the amount of new homes and offices started by builders fell in January. The annual rate was near its decade low, set in August.
Benchmark crude for April delivery was up 38 cents at $100.01 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.66 to settle at $99.63 a barrel on Tuesday.
In currencies, the dollar climbed to 81.89 yen from 81.84 yen late Monday in New York. The euro slid to $1.3754 from $1.3775.
