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HONG KONG - Asian markets slipped further on fears over the euro zone debt crisis Friday as politicians in Greece struggled to form a coalition after pro-austerity parties were lashed in weekend elections.
The euro also edged lower despite reports from Athens that the head of Greece's socialist Pasok party was making tentative progress on building a government, after two other groups had failed.
Regional sentiment was also hit following another batch of data from China added to concerns of a slowdown in the world's number two economy.
Tokyo fell 0.63 percent, or 56.34 points, to 8,953.31, Seoul skidded 1.43 percent, or 27.80 points, to 1,917.13 and Sydney finished 0.24 percent lower, or 10.5 points, at 4,285.1.
Hong Kong fell 1.30 percent, or 262.65 points, to 19,964.63 and Shanghai lost 0.63 percent, or 15.25 points, to 2,394.98.
Attention is focused on Europe after the ruling parties in Greece and France were kicked out by their electorates angry at deep cuts aimed at controlling the region's debt crisis.
Markets fear that new leaders with plans to boost growth rather than cut spending could lead to some countries defaulting on their debt obligations and possibly falling out of the eurozone.
In Athens, Pasok leader Evangelos Venizelos is in talks with other parties to build a coalition after Sunday's polls saw almost two-thirds of voters reject austerity policies imposed on the country in return for bailout cash.
Venizelos, whose party came a distant third at the polls with 41 out of the parliament's 300 seats, had earlier said he wanted to create a unity government that would keep Greece in the eurozone.
Pasok has been charged with building a consensus after the two parties that came ahead of it in Sunday's poll were unable to do so. Failure will likely lead to fresh elections in June.
Venizelos has won the support of the small Democratic Left party to form a cabinet and he is set to hold talks Friday with the conservative New Democracy party, with which it was in a coalition before the polls.
However, dealers sold off the euro, which stood at $1.2920 and 103.09 yen in late Asian trade, compared with $1.2930 and 103.30 yen in New York Thursday. The single currency has tumbled from $1.3137 and 105.55 yen since Friday, before the polls.
The dollar was at 79.79 yen, from 79.95 yen in New York.
On Wall Street the Dow managed to reverse a six-day losing streak after figures showed new claims for US unemployment benefits fell for the second week running last week.
The Dow gained 0.16 percent, the S&P 500 added 0.25 percent and the tech-rich Nasdaq was flat.
New jobless claims totalled 367,000 in the week ending May 5, down from an upwardly revised 368,000 the previous week, the Labor Department said.
However, the market is still uneasy after the department reported last Friday that just 115,000 jobs were created in April, the lowest number in six months.
Analysts also indicated that a $2 billion loss for Wall Street banking giant JP Morgan in six weeks had weighed on sentiment in financial plays.
"The JP Morgan news was the turning point, otherwise we could have seen a positive start for Asian risk assets today," said Stan Shamu, market strategist at IG Markets in Melbourne.
In Beijing, authorities said growth in China's industrial output slowed to 9.3 percent year-on-year in April, down from 11.9 percent in March.
The figure, which follows worse-than-expected trade data on Thursday, has spooked investors who fear a slowdown in the world's number two economy.
Earlier results showed that consumer prices rose 3.4 percent last month, slower than the 3.6 percent in March.
While the figures give leaders breathing space to loosen monetary policy there are fears that they are the latest sign that the country is headed for a hard landing.
On oil markets New York's main contract, West Texas Intermediate crude for delivery in June, was down $1.27 cents to $95.81 per barrel while Brent North Sea crude for June shed 57 cents to $111.16 in the late afternoon.
Gold was at $1,576.75 an ounce at 0800 GMT, compared with $1,591.25 late Thursday.
In other markets, Taipei fell 1.10 percent, or 82.64 points, to 7,401.37. Hon Hai Precision shed 1.48 percent to Tw$86.4 while TSMC was 0.23 percent higher at Tw$85.5.
Manila closed 0.65 percent, or 33.96 points, lower at 5,158.14. Bloomberry Resorts fell 1.10 percent to nine pesos, Alliance Global Group slid 0.31 percent to 12.90 pesos and Philippine Long Distance Telephone was off 0.80 percent at 2,506 pesos.
Wellington fell 0.59 percent, or 20.99 points, to 3,548.06. Sky City fell 4.6 percent to NZ$3.72, Telecom shed 3.0 percent to NZ$2.59 and The Warehouse rose 2.3 percent to NZ$2.67.
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