Asia shares fall over Greece debt Asia shares fall over Greece debt Businessmen walk past a screen showing the Nikkei index (6 May 2010) Investors gr

Asia shares fall over Greece debt

Investors gripped by fear over Greece have sold off shares in huge volumes

Asian stock markets have fallen sharply during morning trading, amid investor fears that Greece's debt crisis could halt the global economic recovery.

Japan's benchmark Nikkei index shed nearly 4%, while Australia's All Ordinaries skidded more than 2%.

It comes a day after US markets had their worst day since 1987, with the Dow Jones falling 9%, before rallying.

Meanwhile, the pound fluctuated as results poured in from Thursday's British general election.

Bond markets opened seven hours early in London, but the predicted sell-off of UK government debt so far has not happened.

Contagion fear

The continued market turmoil comes a day after Greek MPs approved drastic spending cuts in exchange for an international financial rescue plan, amid violent protests in Athens.

Investors fear the Greek debt problem could spread to other European countries Masatoshi Sato Mizuho Investors Securities Check latest market data Robert Peston blog: Greek flu

During early trading on Friday, Japan's Nikkei index drooped as much as 4.1% to its lowest level since early March, before ending the morning 3.7% down.

South Korea's Kospi wilted by 2.9%, while China's Shanghai index fell 2.4%. Shares in Taiwan, Singapore and New Zealand also fell sharply.

Japan's Prime Minister Yukio Hatoyama said he was "very concerned" by the losses.

The country's central bank said it would inject more than $20bn (£13bn) in short-term loans to commercial banks to boost liquidity.

Australian Prime Minster Kevin Rudd said: "I don't wish to be alarmist about any of this but we are following these events with considerable concern."

The BBC's Roland Buerk in Tokyo says the crisis in Europe hurts Japan because its economy has relied on exports for growth.

And as investors flee the euro for currencies perceived to be safer, such as the yen, Japan's currency strengthens, making the products of its companies less competitive abroad, our correspondent adds.

Masatoshi Sato, an analyst at Mizuho Investors Securities, told the news agency AP: "Investors are worried the Greek debt problem could spread to other European countries, like Spain and Portugal."

In New York, the Dow Jones plummeted before bouncing back to end Thursday down about 3.20%.

The BBC's Caroline Hepker in New York says there are rumours that the drop may have been caused by an erroneous "fat finger" trade at a Wall Street bank.

The New York Stock Exchange said it had found no error, but the Securities and Exchange Commission and Procter and Gamble, which was badly hit, are reviewing the matter.