Shares and euro fall as debt fears rattle markets

Asia stocks fell to multi-month lows, the euro slid and oil and higher yielding currencies weakened on Tuesday on fears that Europe's sovereign debt woes will trigger a renewed crisis in the continent's banking sector.

Heightened tensions and talk of war on the Korean peninsula also jangled investor nerves in East Asia.

Europe's fumbling response to a Greek debt crisis and bulging deficits in other euro zone countries have unnerved markets over the past six weeks, and the central bank takeover of a small Spanish lender at the weekend stoked fears of a wider meltdown.

"This situation with the Spanish bank makes investors nervous because it raises suspicions that something else may be smoldering behind the scenes," said Hiroichi Nishi, equity division general manager at Nikko Cordial Securities in Tokyo. >>