"With little forward movement in the EU narrative despite new leadership in Italy and Greece, markets remain tense," said Stewart Hall, senior currency strategist at RBC Markets. "We have a new prime minister and cabinet in Italy, with Mario Monti as leader and finance minister, but the honeymoon will be short-lived, as are the policy-making time-lines."
Japan's Nikkei Stock Average fell 0.4%, Australia's S&P/ASX 200 slid 0.3%, South Korea's Kospi Composite lost 0.7% and New Zealand's NZX-50 added 0.1%.
Dow Jones Industrial Average futures were down 20 points in screen trade.
Regional financial stocks were mostly lower, tracking a decline in their U.S. counterparts on Wednesday after Fitch Ratings said the broad outlook for U.S. banks will darken unless the eurozone debt crisis is resolved in a timely and orderly manner.
"Contagion from the eurozone debt crisis is spreading quickly, threatening to turn a regional crisis into a global crisis. As highlighted by Fitch Ratings, further contagion would pose a risk to U.S. banks," Credit Agricole said in a note to clients. Such a prospect would be disastrous for Asia and the rest of the world, reigniting fears of a repeat of the 2008 global financial crisis that froze credit markets and led to the worst global recession in decades.
In Seoul, Hana Financial Group fell 2.6% and Korea Exchange Bank lost 2.1%. In Tokyo, Mitsubishi UFJ Financial fell 1.2% and Sumitomo Mitsui Financial tumbled 1.2%, while National Australia Bank was down 1.7% in Sydney.
Energy companies were mixed across the region despite Nymex crude oil breaking above the $100 per barrel mark to a five and a half month high of $102.89 on Wednesday. S-Oil rose 0.4% in Seoul, while Inpex and Japan Petroleum Exploration rose 2.3% and 2.0% respectively in Tokyo.
Woodside Petroleum and Santos fell 1.2% and 0.9% in Sydney.
December Nymex crude oil futures were recently down 60 cents at $101.99 per barrel on Globex.
In foreign exchange markets the euro remained under selling pressure against the U.S. dollar after falling to a fresh five-week low in early trade as investors remained cautious on the single currency ahead of much-awaited Spanish and French bond auctions later.
"Market participants focused on the negatives ahead of upcoming French and Spanish bond auctions. The worry is that the ECB will have to buy more debt to prop up the sales - this speculation did little to help market concerns," said Joel Murphy, currency analyst at Go Markets in Melbourne.
The single currency was at $1.3435 against the dollar, from $1.3465 late Wednesday in New York, and at ¥103.50 against the yen, from ¥103.75. The dollar was at ¥77.05, from ¥77.06.
Spot gold was at $1,758.60 per troy ounce, down $3.60 from its New York settlement on Wednesday.
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