Asian shares fall amid Korean peninsula tensions

TOKYO — Asian stock markets fell Monday as Seoul prepared to hold live firing drills that threaten to escalate tensions with North Korea. South Korea's Kospi was down 0.9 percent to 2,009.52 after earlier falling as much as 1.5 percent. South Korea said Monday it would go ahead with the drills from a front-line island despite North Korea's threat to retaliate. Marines were expected to conduct the one-day artillery drills on Yeonpyeong Island, which was shelled by a North Korean artillery barrage last month. The North has warned of a "catastrophe" if South Korea goes ahead with the drills. Korean blue chips lost ground, with LG Electronics Inc. down 1.7 percent. The geopolitical concerns hurt sentiment across the region. Japan's Nikkei 225 index was down 0.3 percent to 10,271.28, Hong Kong's Hang Seng index shed 0.4 percent to 22,626.52 and the Shanghai Composite index fell 0.8 percent to 2,868.95. Benchmarks in Singapore and New Zealand also retreated. Ongoing worries about Europe's debt problems weighed on exporter shares in Tokyo as well. Kyocera Corp. fell 1.2 percent, while Ricoh Co. declined 1.4 percent. Toyota Motor Corp. was off 0.3 percent after the Nikkei financial daily reported that the world's biggest automaker could face a double-digit decline in Japan sales next year. Australian shares, however, managed to climb into positive territory on higher metals prices. The S&P/ASX 200 rose 0.1 percent to 4,766.1. In New York Friday, stocks ended flat as investors shrugged off encouraging economic signs and a tax-cut package expected to lift economic growth. The Dow Jones industrial average fell 7.34 points, or 0.06 percent, to close at 11,491.91. In currencies, the dollar fell to 83.86 yen from 83.96 yen late Friday. The euro fell to $1.3149 from $1.3186. Benchmark crude for January delivery was up 42 cents at $88.44 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 34 cents to settle at $88.02 on Friday. — AP