BANGKOK ? World stock markets fell Monday as a change of government in debt-laden Spain and warnings from Asian officials of a sharp growth slowdown underlined the challenges facing the world economy.
Benchmark crude fell below $97 per barrel. The dollar strengthened against the euro but slipped against the yen.
European shares retreated in early trading. Britain's FTSE 100 slipped 1.2 percent to 5,300.67. Germany's DAX dropped 1.5 percent to 5,715.68 and France's CAC-40 slid 1.3 percent to 2,956.66.
The Nikkei 225 index in Tokyo fell 0.3 percent to end at 8,348.27, its lowest closing since March 2009.
Wall Street was set to lose ground, with Dow Jones industrial futures falling 0.9 percent at 11,659 and S&P 500 futures down 1.2 percent at 1,199.80.
Market jitters were in evidence a day after Spain voted in a new government ? the third time in as many weeks that Europe's debt crisis has toppled an administration. Governments in financially troubled Greece and Italy have also fallen.
Spain dumped its ruling Socialist government Sunday for the conservative leadership of Mariano Rajoy, who inherits an economy wracked by debt and an unemployment nightmare ? which at more than 21 percent is the highest among the 17 nations that use the euro.
Rajoy also must lower Spain's soaring borrowing costs with deficit-reducing measures while preventing an already moribund economy from heading into a double-dip recession.
Adding to pessimism, Chinese Vice Premier Wang Qishan, who oversees trade and finance, said this weekend that the global economic situation is "extremely serious" and predicted the malaise is likely to be long term, state media reported.
The effects of slowing global demand were also evident in Japan, where exports fell for the first time in three months in October. Singapore's government, meanwhile, said it expects the island's economy to grow as little as 1 percent next year, down from a 5 percent expansion this year as export demand from developed countries wanes.
Hong Kong's Hang Seng fell 1.4 percent to 18,225.85 and South Korea's Kospi dropped 1 percent to 1,820.03. Australia's S&P/ASX 200 fell 0.3 percent to 4,163. Mainland Chinese shares fell slightly, with the benchmark Shanghai Composite Index inching down less than 0.1 percent to 2,415.13, its lowest close in almost one month.
Stocks that are heavily dependent on exports to the West have come under pressure recently, said Linus Yip of Hong Kong-based First Shanghai Securities. "The market right now is still worried about future economic growth, the European debt problem," Yip said.
In Tokyo trade, Mazda Motor Corp. lost 5.1 percent and Panasonic Corp. lost 2 percent. South Korea's LG Chem Ltd., which makes batteries for cars, lost 4.3 percent.
Energy and resource shares were hit by the uncertain outlook for the global economy. Hong Kong-listed China National Offshore Oil Corp., known as CNOOC, fell 3 percent. Japanese energy explorer Inpex Corp. fell 2.6 percent.
Mainland Chinese shares in textiles and railway infrastructure companies were among that market's gainers while shares in coal miners and environmental protection companies weakened.
"Earlier forecasts on credit easing haven't actually come true and the situation in Europe is also affecting sentiment here," said Li Jianfeng, an analyst at Caida Securities, based in Shanghai.
Gains were muted on Wall Street on Friday. While the Conference Board's index of leading economic indicators rose more than Wall Street analysts were expecting ? a sign that the economy may pick up in the coming months ? many investors were cautious as a key Congressional committee remained deadlocked on ways to cut the U.S. budget deficit.
The Dow Jones industrial average gained 0.2 percent to close at 11,796.16. The Standard and Poor's 500 lost less than 0.1 percent to 1,215.65. The Nasdaq composite slid 0.6 percent to 2,572.50.
Benchmark crude for December delivery was down $1 at $96.65 a barrel in electronic trading on the New York Mercantile Exchange on Monday. The contract fell $1.41 to finish at $97.41 per barrel on the Nymex on Friday.
In currency trading, the euro fell to $1.3462 from $1.3518 late Friday in New York. The dollar weakened to 76.79 yen from 76.97 yen.
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Researcher Fu Ting in Shanghai contributed.
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