Asian shares down ahead of Europe debt plan (AP)

SINGAPORE ? Asian shares were lower Wednesday as traders awaited details of a plan to contain Europe's sovereign debt crisis that would limit damage to the continent's banks.

U.S. markets slid overnight amid concern that disagreements among European Union members could derail a comprehensive debt plan.

Japan's Nikkei 225 stock average was less than 0.1 percent down at 8,759.51 while Hong Kong's Hang Seng index lost 0.1 percent to 18,947.77. South Korea's Kospi was marginally lower at 1,887.25.

Australia's S&P/ASX 200 gained 0.4 percent to 4,242.50 and China's Shanghai Composite rose 1.1 percent to 2,437.01.

Benchmarks in Thailand and the Philippines fell, while those in Taiwan and Indonesia were higher. Markets in Singapore and Malaysia were closed for the Deepavali holiday.

Overnight in New York, the Dow Jones industrial average closed down 1.7 percent at 11,706.62.

Global stock markets have rallied this month on expectations European leaders would be able to prevent contagion from spreading from a possible Greek debt default. Investors are expecting a major recapitalization of private banks that face huge losses from Greek bonds.

Markets could drop sharply if European policymakers emerge from a summit later Wednesday without a credible plan.

European officials are working to patch together a plan that will prevent banks from taking huge losses if the Greek government defaults on its bonds. A messy default could lead to a credit freeze-up similar to the one in 2008 following the fall of Lehman Brothers.

"The immediate fall-out from a Greek default should be manageable and much less damaging than that which followed the collapse of Lehmans," Capital Economics said in a report. "However, this assumes that policymakers are able to prevent contagion to other, much larger borrowers, such as Italy."

U.S. equities have also been bolstered in October by strong corporate earnings and signs the economy will likely avoid a recession this year. However, a report showed Tuesday that consumer confidence plunged in October to the lowest level since March 2009.

The broader Standard & Poor's 500 index dropped 2 percent to 1,229.05, coming off the highest close for the S&P 500 since Aug. 3 in the previous session.

In currencies, the dollar fell slightly to 76.03 yen from 76.07 yen late Tuesday in New York. The euro stood at $1.3914 from $1.3909.

Oil prices hovered above $93 a barrel Wednesday in Asia after a report showed U.S. crude supplies grew more than expected last week, suggesting demand remains sluggish.

Benchmark crude for December delivery was up 16 cents at $93.33 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.90, or 2.1 percent, to settle at $93.17 in New York on Tuesday.

Brent crude was up 31 cents at $111.23 a barrel on the ICE Futures Exchange in London.

Source: http://us.rd.yahoo.com/dailynews/rss/stocks/*http%3A//news.yahoo.com/s/ap/20111026/ap_on_re_as/world_markets

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