Europe debt woe has Asian impact

Tokyo: Asia stocks fell, with the regional benchmark index recording its biggest weekly retreat in six weeks, as political wrangling in Greece put a European rescue package in doubt and China's manufacturing growth slowed.

BHP Billiton Ltd, the world's largest mining company, was the biggest drag on the MSCI Asia Pacific Index as commodity prices dropped and staff at three of its mines threatened to strike.

OneSteel Limited, a Sydney-based steel manufacturer, fell the most on the index last week dropping 24 per cent on lower than expected earnings.

Toyota dropping three per cent on concern that renewed uncertainty about Europe's debt crisis will damp global demand.

The MSCI Index declined 3.6 per cent to 120.22 last week, its biggest weekly drop since the period ending September 23. Stock prices fell after Greek Prime Minister George Papandreou announced on October 31 a parliamentary confidence vote and his desire to hold a referendum on Europe's rescue pact.

He scrapped the plan November 3, the same day the European Central Bank unexpectedly cut interest rates, spurring a regional rally.

"People were naturally sceptical that the resolution agreed last week in Europe was going to bring an end to the volatility in markets, and that's clearly the case with what we've seen," said Tim Schroeders at Pengana Capital Ltd. in Melbourne.