Asian stocks fell over-night, with the regional benchmark index poised to slide for the first time in three days, on concern Italy's elections may reignite Europe's debt crisis

The MSCI Asia Pacific Index fell 0.6 to 133.47 in Tokyo with more than five shares dropping for each that increased. The gauge has climbed 0.2 per cent in February, headed for a fourth month of gains, the longest such streak since September 2009.

"Uncertainty about the Italian election result has sparked fears that they may abandon their austerity drive, possibly sparking another bout of volatility in Europe," said Matthew Sherwood, head of investment market research in Sydney at Perpetual Investments.

This may "make governing and implementing much-needed economic reforms almost impossible".

Futures on the Standard and Poor's 500 Index rose 0.3 per cent this morning. The gauge declined by 1.8 per cent, the biggest drop since November, yesterday as early results suggested Italy's election would result in a hung parliament, leading to another vote and casting doubts on plans to deal with its debt.

The MSCI Asia Pacific Index gained 10 per cent from the end of October through yesterday as Japanese shares rallied on speculation a new government led by Prime Minister Shinzo Abe will press for more stimulus to beat deflation. Asia's benchmark traded at 14.7 times estimated earnings compared with 13.5 for the Standard and Poor's 500 Index and 12.4 for the Stoxx Europe 600.

Japan's Nikkei 225 Stock Average dropped 2.3 per cent, the most since January 16th. Australia's SandP/ASX 200 Index slid 1 per cent and New Zealand's NZX 50
added 0.3 per cent. South Korea's Kospi Index fell 0.5 per cent. Hang Seng Erases Gains Hong Kong's Hang Seng Index fell 1.3 per cent today, erasing this year's 5.1 perc ent gain reached on Jan. 30.

The Hang Seng China Enterprises Index of mainland shares dropped 2 per cent to its lowest since December 11th. The Shanghai Composite Index lost 1.4 per cent while Taiwan's Taiex Index slid 0.8 per cent.

Singapore's Straits Times Index fell 1 per cent. "Many investors are starting to rewind their risk positions," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. "The Italian elections are causing uncertainty about its political stability, but this time the euro region does have a safety net with their unlimited bond-purchase plan."

Sony fell 3.7 per cent to 1,290 yen. HSBC Holdings Plc, Europe's biggest lender, fell 1.4 per cent to HK$84.15 in Hong Kong. Esprit Holdings Ltd., a clothier that depends on Europe for 79 per cent of its sales, declined 1.4 per cent to HK$10.18.

Bloomberg