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BEIJING – Most Asian stock markets fell Wednesday amid worries about Europe's debt problems, Korean tensions and disappointing growth in Australia.

Oil prices rose above $84 a barrel amid the release of surveys showing China's manufacturing boom accelerated in November.

Japan's Nikkei 225 index was down less than 0.1 percent to 9,935.86, Hong Kong's Hang Seng index lost 0.4 percent to 22,927.99, and the Shanghai Composite index fell 0.3 percent to 2,812.31.

Australia's S&P/ASX 200 was down 0.3 percent at 4,570.4 after data showed the country's gross domestic product expanded just 0.2 percent in the third quarter from the previous three months.

"Trading is sluggish today. Investors are on the sidelines waiting to see what happens in Korea and the European debt situation," said Linus Yip, a strategist in Hong Kong for First Shanghai Securities.

In China, investors were watching for a possible rate hike to cool inflation, which might slow rapid growth and rein in liquidity that is helping to support share prices.

"At this point, it's a psychological effect on the market," though a rate hike would be "not so damaging," Yip said. "Overall, for mainland China and the Hong Kong market, the outlook is still positive."

Among a handful of gainers, South Korea's Kospi rose 0.7 percent to 1,918.59 as jitters over sporadic skirmishes between the two Koreas eased. Market benchmarks in Taiwan and Bombay also were up.

Meanwhile, surveys released Wednesday showed China's manufacturing recovery accelerated in November. China is a major importer of oil and other raw materials, and stronger manufacturing could help to boost global demand.

The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, rose to 55.2 last month from 54.7 in October and 53.8 in September on a 100-point scale where numbers above 50 indicate rising activity.

A competing index, the HSBC China Manufacturing PMI rose to an eight-month high of 55.3 percent in November, up from 54.8 percent in October.

In New York on Tuesday, the Dow Jones industrial average fell 46.47, or 0.4 percent, to close at 11,006.02.

The Dow was down earlier but recovered some of its losses after President Barack Obama and Republican lawmakers promised to seek a compromise before the end of the year on extending tax cuts adopted during the presidency of George W. Bush.

Some comfort emerged with the news that consumer confidence in the U.S. ratcheted up in November ahead of the crucial Christmas buying season, another sign that the recovery in the world's largest economy is picking up pace.

The Conference Board reported that its main U.S. consumer confidence index rose to a five-month high of 54.1, from a revised 49.9 in October. Analysts were expecting a far more modest rise to 52.

Sentiment dragged as investors sold off government bonds from Spain, Portugal and Italy. The bailout of Ireland's banks has failed to assuage worries that other weak European economies will also need to be rescued.

The broader Standard & Poor's 500 index fell 0.6 percent, to 1,180.55 and the Nasdaq composite index dropped 1.1 percent, to 2,498.23.

Benchmark oil for January delivery rose 7 cents to $84.18 a barrel at midday Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract fell $1.62 to settle at $84.11 on Tuesday.

In currencies, the dollar fell to 83.48 from 83.92 late Monday. The euro slid to $1.3008 from $1.3039.

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HONG KONG (AFP) – Asian shares reacted nervously Wednesday to the latest hostilities on the Korean peninsula as well as wider economic woes, although several markets regained ground later in the day.

Tokyo's Nikkei Index ended the session down 0.84 percent, or 85.08 points, at 10,030.11 after falling sharply on opening, while Sydney's S&P/ASX 200 index fell 0.09 percent, or 4.4 points, to 4,584.7.

Seoul's Kospi index shed 0.15 percent, or 2.96 points, ending at 1,925.98, after initially falling 2.33 percent in its first reaction to Tuesday's outbreak of artillery fire on the border with North Korea.

Hong Kong's Hang Seng ended the session up 0.56 percent, or 127.72 points, at 23,023.86, while Shanghai's Composite index rose 1.12 percent, or 31.65 points, to 2,859.94.

The Korean standoff added to negative sentiment caused by the eurozone debt crisis, expectations of further measures by China to cool its economy and a US Federal Reserve forecast of much slower growth next year than previously expected.

In Tokyo, stocks in companies with exposure to the troubled eurozone such as Sony, Nikon and Mazda noticeably suffered.

But Lee Sang-won at Hyundai Securities in Seoul said nerves were starting to calm.

"Investors have learned from the past that financial risks generated by South-North Korea tensions haven't lasted for long," Lee told Dow Jones Newswires.

In similar vein, Jacky Zhang, analyst at Capital Financial Management in Shanghai, said: "The likelihood that tensions in Korea will expand to a full-blown war is very low."

Traders were mostly guarded however about the comeback by Hong Kong and Shanghai, which followed a 2.67 percent plunge on Tuesday.

"Today's rebound is mostly a technical recovery as the central government will continue to launch tightening measures in the future to combat inflation," said China Dragon Securities analyst Guan Yewen.

Trading in New Zealand Oil and Gas was suspended after police said 29 people caught in a disaster at the Pike River mine were likely dead. New Zealand Oil and Gas holds almost a one-third stake in the mine.

US stocks closed sharply lower on Tuesday following the warning from the Federal Reserve and declines in Europe, weighed notably by energy stocks such as Chevron and Exxon Mobil.

The blue-chip Dow Jones Industrial Average slipped 1.27 percent, the broader S&P 500 index fell 1.43 percent and the tech-rich Nasdaq lost 1.46 percent.

The euro edged higher in Asian trade despite Standard & Poor's move to lower its credit ratings for Ireland.

The single European currency edged up from Tuesday's two-month lows to 1.3401 dollars, compared with 1.3364 dollars in New York, with the Irish downgrade already priced in, according to analysts.

The euro bought 111.55 yen, compared with 111.17 in New York.

The safe-haven greenback rose against the yen, standing at 83.29 compared with 83.16 yen in New York, benefitting from the erosion of risk appetite.

The Korean won fell to 1,147.38 against the dollar, from 1,129.80 in New York overnight.

Crude prices rebounded slightly, mirroring the small hop in the euro's value.

New York's main contract, light sweet crude for January delivery, gained 46 cents to 81.71 dollars in Asian afternoon trade. Brent North Sea crude for January added 50 cents to 83.75 dollars.

Gold closed at 1,375.50-1,376.50 US dollars an ounce in Hong Kong, up from Tuesday's close of 1,363.00-1,364.00 dollars.

In other markets:

-- Manila fell 0.55 percent, or 22.81 points, to 4,124.54.

Top-traded SM Investments fell 2.35 percent to 498 pesos, while Philippine Long Distance Telephone shed 0.98 percent to 2,424 pesos. Cebu Air dropped 1.41 percent to 125.50 pesos.

-- Wellington rose 0.32 percent, or 10.45 points, to 3,269.21.

-- Taipei fell 0.38 percent, or 31.58 points, to 8,297.05.

Taiwan Semiconductor Manufacturing Company fell 0.32 percent to 63.2 Taiwan dollars, while computer maker Acer dropped 0.22 percent to 89.6.

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LONDON (AFP) – European stocks sank on Tuesday, after heavy Asian losses, as investors dumped risky assets on the back of fading enthusiasm over Ireland's bailout and a spike in tensions between North and South Korea.

Financial markets were also hit by an overnight raid by FBI agents on three hedge fund firms as part of a vast insider-trading probe, and Chinese efforts to cool its booming economy.

"Markets are trading 'risk off' this morning on a combination of factors," CMC Markets analyst Michael Hewson told AFP.

"Irish bailout fears and political uncertainty, the Korean situation and FBI raids on hedge funds ... have made a heady cocktail for investors to digest.

"This has caused significant risk aversion this morning with the US dollar and gold gaining as a result."

Asian stocks slumped on Tuesday, unnerved also by the eurozone debt crisis, firing on the Korean peninsula and expectations that China will take further steps to rein in inflation.

In late morning trading, Dublin's stock market dived 1.94 percent, with the main fallers being in Ireland's battered banking sector.

London fell 0.54 percent, Frankfurt weakened 0.09 percent and Paris dipped 0.70 percent.

The European single currency slid to 1.3592 dollars from 1.3622 in New York late on Monday, as the greenback was boosted by its safe-haven status in times of economic and geopolitical uncertainty.

European shares rallied early on Monday but finished in the red as optimism over Ireland's bailout gave way to fears it might not ease pressure on other weak eurozone states, six months after a rescue for Greece.

"Another bailout -- and investors fear this won't be the last," said Vincent Chaigneau, head of fixed income strategy at French bank Societe Generale.

"The market reaction to the bailout news was fairly positive ... but the mood did not last .. Overall, the reaction to the rescue package was not quite what policymakers had hoped for," he said.

"We had warned ... that there might have been too much optimism on that front. The rescue is seen as a salve but does little to fix the structural problems."

Markets also fell on the back of political tensions in Dublin, as Irish Prime Minister Brian Cowen's governing coalition appeared to fall apart.

The turmoil intensified on Tuesday after Cowen promised to call a general election in the New Year once parliament passes a budget at the centre of the international bailout.

Cowen revealed late Sunday that his administration had applied for aid from the European Union and the International Monetary Fund, adding that it would be less than 100 billion euros (137 billion dollars).

Ilya Spivak, currency strategist at trading site Daily FX, agreed that Tuesday's fierce sell-off in risky assets on Tuesday was rooted in eurozone worries and Korea fears.

"The sell-off is being chalked up to a mixture of renewed sovereign risk concerns on the eurozone periphery ... overlaid with geopolitical concerns after North Korea shelled an island near the disputed Western border with its Southern counterpart," Spivak said.

North Korea fired dozens of artillery shells onto a South Korean island on Tuesday, killing one person, setting homes ablaze and triggering an exchange of fire as the South's military went on top alert.

In Asia, Hong Kong shares tumbled 2.67 percent, Shanghai shed 1.94 percent and Sydney lost 1.17 percent. Tokyo was shut for a holiday.

Wall Street closed mixed on Monday as Ireland's bailout renewed fears that other European states may require similar aid and as a large US insider-trading probe accelerated.

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LONDON – World markets and the euro slid Tuesday as investors worried that Ireland's debt crisis will spread to other fiscally weak European nations and following news that North Korea had fired artillery rounds into South Korean territory, reportedly killing at least two marines.

In Europe, the FTSE 100 index of leading British shares was down 55.82 points, or 1 percent at 5,625.01 while Germany's DAX fell 52.77 points, or 0.8 percent, to 6,769.28. The CAC-40 in France was 60.06 points, or 1.6 percent, lower at 3,758.83.

Wall Street was also poised to open sharply lower despite encouraging U.S. economic growth figures — Dow futures were down 99 points, or 0.9 percent, at 11,066 while the broader Standard & Poor's 500 futures fell 12.6 points, or 1.1 percent, at 1,185.30.

Sentiment, already downbeat as Europe's debt crisis shows few signs of abating, was hit further by the news that North Korea bombarded the South Korean island of Yeonpyeong, near their disputed western border, setting buildings ablaze and killing at least two marines, according to South Korean officials

"As if all of the European sovereign issues weren't enough, and they are, markets were further roiled as North Korea, with impeccable timing, decided to show its military might," said Jennifer Lee, an analyst at BMO Financial Group.

Rising geopolitical tensions prompt investors to rein in risky trades, such as stocks, and pile into what are widely considered to be safer harbors for their cash, such as the dollar, the Swiss franc and gold.

Continuing to weigh on sentiment is the fear that Europe's debt problems have not been solved by the Irish government's decision to ask for a financial bailout from the European Union and International Monetary Fund.

Experts said the bailout, which is expected to amount to around euro90 billion ($123 billion), has done little to shield other heavily indebted countries from a potential collapse in investor confidence.

Portugal and Spain are considered the next nations most vulnerable to market turmoil after the rescue of Greece and Ireland. Spain is the big worry for EU policymakers because it accounts for around 10 percent of the euro-zone economy, in contrast to Greece, Ireland and Portugal, which account for less than 2 percent each.

"Bailing out weaker partners is fast becoming seen as little more than strapping a band-aid on a gaping flesh wound," said Andrew Wilkinson, senior market analyst at Interactive Brokers.

Investors are also worried that the activation of the bailout will not be as smooth as hoped, as Ireland's premier Brian Cowen fights for his future. Lawmakers in his own party have mounted a rebellion to try to oust him, an effort that could trigger a snap election and delay a massive EU-IMF bailout of Ireland.

On Monday, Cowen pledged to call elections early next year if an austerity budget is passed. His announcement was triggered by the decision by the Green Party to withdraw its support for the government, even though it pledged to back the 2011 budget, due to be unveiled on Dec. 7.

These concerns, coupled with the heightened geopolitical tensions, weighed on the euro — by mid afternoon London time, the euro was down 1 percent at $1.3490.

Reports of North Korea's attack on its neighbor came as Asian trading was drawing to a close. South Korea's Kospi closed down 0.8 percent at 1,928.94.

Elsewhere, Hong Kong's Hang Seng index tumbled 2.7 percent to 22,896.14 and China's Shanghai Composite Index shed 1.9 percent to 2,828.28 with sentiment additionally impacted by mounting expectations Beijing will take more steps to cool inflation that could slow economic growth. Japan's markets were shut for a national holiday.

Given what's going on in Europe and Asia, there was little reaction in the markets to the news that the U.S. economy grew by more than previously predicted during the third quarter of the year. The Commerce Department reported that the world's largest economy grew at an annualized rate of 2.5 percent, up on the previous estimate of 2 percent.

In the oil markets, benchmark crude for January delivery was down $1.36 to $80.38 a barrel in electronic trading on the New York Mercantile Exchange.

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AP Business Writer Kelvin Chan in Hong Kong contributed to this report.

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