Asian stocks down on worries over Europe

Asian stock markets tumbled in early trading Thursday on fresh concern over Europe's economic outlook after Moody's Investors Service warned it may downgrade Spain's debt rating.

Japan's benchmark Nikkei 225 stock index declined 99.90 points, or 1.1 percent, to 9,282.74, extending losses after falling nearly 2 percent Wednesday to a seven-month low.

Renewed worries over the European economic outlook offset positive leads including Thursday's Bank of Japan's survey showing business confidence at major Japanese manufacturers improved for a fifth straight quarter on a solidifying global recovery.

South Korea's Kospi index shed 0.4 percent to 1,692.17, and Australia's S&P/ASX 200 was down 1.0 percent at 4,282.50.

On Wall Street overnight, the Dow Jones industrial average lost 96.28 points, 1.0 percent, to 9,774.02, marking the fifth consecutive decline. It was also the lowest finish since early November.

Moody's Investors Service placed Spain's sovereign debt rating "on review for possible downgrade" Wednesday because of weak economic prospects.

Spain - one of Europe's most indebted countries - has only just crawled out of nearly two years of recession after a boom fueled by construction and free-flowing credit.

The nation's public coffers have been drained by spending to cope with a jobless rate that now stands at a euro zone high of 20 percent. Spain is under intense international pressure to slash a ballooning deficit.