BANGKOK (AP) -- Asian stock markets slumped Thursday amid new signs of pressure on Europe's banking system and a downturn on Wall Street.
Benchmark oil lingered above $99 per barrel while the dollar rose against the euro but fell against the yen.
Japan's Nikkei 225 index fell 0.7 percent to 8,362.33. South Korea's Kospi lost 0.1 percent to 1,823.44 and Hong Kong's Hang Seng Index was 0.9 percent lower at 18,348.95.
Benchmarks in Singapore, Taiwan and Indonesia were also lower, while Malaysia and the Philippines rose and mainland China was mostly flat. Overall, stock markets were quieter than normal as many traders go on vacation the week between Christmas and New Year's.
Investor sentiment waned hours after the European Central Bank said banks had parked $590.72 billion with it overnight, surpassing the record set only Monday. That means European banks were less willing to take the risk of making short-term loans to each other, opting instead to earn low interest rates from the ECB.
The move shook confidence in the euro currency, which on Wednesday dropped to $1.2910 -- its lowest level against the dollar in nearly a year -- before recovering slightly.
"As we have seen time and time again throughout 2011, when EUR/USD falls, so does equities, and so does gold, with traders buying into fixed income assets," Chris Weston of IG Markets in Melbourne wrote in a research note.
Even successful bond auctions in Italy failed to lift the euro against the dollar. Demand for Italian bonds was strong Wednesday, and the country was able to pay lower interest rates.
That's a sign that investors are more confident about Italy's ability to repay its debt. The country recently passed a big package of budget-cutting measures.
The yen's rise to a 10-year high against the euro put stress on Japan's exporters. Kyodo News agency said the euro briefly fell to 100.35 yen in Tokyo, its lowest level against the Japanese currency since June 2001.
Canon Inc. fell 1 percent and Sharp Corp. shed 3.3 percent. Yamaha Motor Corp. lost 1 percent.
In currency trading Thursday, the euro fell to $1.2927 from $1.2941 late Wednesday in New York. The dollar fell to 77.78 yen from 77.91 yen.
On Wall Street, the Dow Jones industrial average fell 1.1 percent to 12,151.41. The S&P 500 fell 1.3 percent to 1,249.64. The Nasdaq composite declined 1.3 percent to 2,589.98.
Benchmark crude for February delivery rose 19 cents to $99.55 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.98 to settle at $99.36 in New York on Wednesday.