Global markets fall further on Greek debt fears

Stock markets across the world fell and the euro came under renewed pressure today in what appeared to be a major flight to safety by investors fearful that the Greek debt crisis is spreading.

Japan's benchmark Nikkei 225 index slumped 3.3 per cent to its lowest level since mid-March, as investors digested the turmoil that has roiled stock markets around the world this week and battered the euro. South Korea, which had been closed for a national holiday on Wednesday, also played catch-up with the global declines, falling 2 per cent on Thursday.

Elsewhere, in the Asia-Pacific region, the falls were more muted. By late afternoon, the key indices in Singapore and Hong Kong were down 1.4 per cent and 0.9 per cent, respectively. The Taiex index in Taiwan fell 1.5 per cent.

Emerging markets, especially those that are in reasonable economic shape and relatively removed from euro zone stress, were particularly hard hit, with shares down 1.4 per cent. MSCI's all-country world stock index was down 0.6 per cent.

Focus was on a meeting of the European Central Bank, which is expected to leave interest rates unchanged but will almost certainly have to address the crisis, which saw deadly riots in Athens on Wednesday and pressure building on Spain, Portugal and others.

The euro tumbled to a 14-month low against the dollar before recovering slightly on what traders said was Asian buying.