Nerves got the better of investors in Tokyo and Hong Kong on Tuesday as investors mulled the inconclusive results of the Italian election.

The benchmark Nikkei 225 index closed down 263 points at 11,398 in Tokyo while the Hang Seng receded 300 points at 22,519 in Hong Kong.

Investors were spooked by election results indicating that Italy has been left with a split result. The nation's centre-left coalition won the lower house but failed to win a majority in the upper house, sparking fears a deadlock in the government.

The election results also revealed growing support for political groups opposed to economic reforms in Italy. On a wider scale, the election results re-ignited fears about the Eurozone debt crisis.

Nerves sent the euro lower and investors flocking to the safe haven qualities of the Japanese yen. That pressured big name exporters such as Nikon Corp, which fell 3.9%. Sony skidded 3.7% and Ricoh Co lost 3.9%.

Honda Motor retreated 3.1% and Nissan Motor tanked 2.55%. Clothing giant Esprit Holdings fell 1.4%.

In Hong Kong resource stocks such as Cnooc fell 1.7% on concern about economic wobbles in light of Italy's elections and data out on Monday showing weakness in Chinese manufacturing.

Jiangxi Copper declined 2.6% while Angang Steel dragged 2%.

In earnings news, lending giant Bank of East Asia added 1.1% after it posted a 39% in year-on-year net profit following a spike in trading income.



CJ

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