Asian Markets Slip on Economic Fears

Asian markets were weaker Tuesday as investors continued to fret about the economic impact of high oil prices. Japan, South Korea and Australia all finished lower.

Crude oil initially surged to a fresh all-time high of $143.67 on Monday but later fell as weak U.S. demand countered mounting tensions between OPEC nation Iran and Israel. Oil is currently trading at the $140 a barrel level.

Japan's Nikkei 225 Average dipped 0.1 percent to set its longest losing streak in nearly four years as exporters fell on a firmer yen, while worries about the economic outlook dampened investor appetite for risk. The BOJ's tankan survey showed better than expected Japanese business sentiment and that helped to keep the index from sliding further.

Seoul shares closed slightly lower, continuing their downward run for a fourth straight session as a batch of economic data pointed to weakening economic growth and mounting stagflation
pressure, weighing on exporters.

Australian shares fell 1.5 percent as nagging credit worries triggered selling in the top banks, while energy firms such as Woodside Petroleum fell after oil prices retreated from a record peak.

Singapore's Straits Times Index slipped into negative territory, falling 1.4 percent, in a lackluster session. But Sembcorp Marine attracted investors' interests after one of its units won a $640 million contract to build a deepwater rig.

China's Shanghai Composite Index reversed course after a positive start, sliding 3.1 percent to a 16-month low. The sharp decline was led by financial and property shares. Investors headed for the exits after regulators approved two major IPOs, fanning fears that the market would not be able to cope with large supplies of fresh equity.

Markets in Hong Kong are closed for a holiday. They will reopen on Wednesday.

© 2008 CNBC.com