A worker restores a damaged door of a branch of a Bank of Cyprus after a bomb attack at Polemidia a suburb of the southern port city of Limassol, Cyprus, early Monday, March 25, 2013. After failing for a week to find a solution to a crisis that could force their country into bankruptcy, Cypriot politicians turned to the European Union on Sunday in a last-ditch effort to help the island nation forge a viable plan to secure an international bailout. (AP Photo/Pavlos Vrionides)
A worker restores a damaged door of a branch of a Bank of Cyprus after a bomb attack at Polemidia a suburb of the southern port city of Limassol, Cyprus, early Monday, March 25, 2013. After failing for a week to find a solution to a crisis that could force their country into bankruptcy, Cypriot politicians turned to the European Union on Sunday in a last-ditch effort to help the island nation forge a viable plan to secure an international bailout. (AP Photo/Pavlos Vrionides)
BANGKOK (AP) ? Asian stock markets fell Tuesday as relief turned to worry over a bailout that prevents Cyprus from going bankrupt.
The bailout, signed and sealed Monday by European finance ministers, initially alleviated fears of a possible collapse of Cyprus' banking system. But soon worries arose over the terms of the deal: it requires a banking overhaul and big losses for bondholders and depositors.
"Overall, we think that the market will eventually regard the handling of this crisis as a set-back to euro zone credibility," analysts at Credit Agricole CIB in Hong Kong said in a market commentary.
Japan's Nikkei 225 index fell 0.4 percent to 12,494.34. Hong Kong's Hang Seng lost 0.3 percent to 22,176.69. Australia's S&P/ASX 200 dropped 0.7 percent to 4,953.10. South Korea's Kospi rose 0.4 percent to 1,985.01.
Concern intensified late Monday after a key official indicated that the Cyprus rescue may have to be repeated in other nations with struggling banks. Dutch finance minister Jeroen Dijsselbloem said that bondholders and depositors should be prepared to take losses if the banks they put their money in run into trouble.
European markets in financially weaker states, such as Italy and Spain, fell sharply. Italy's FTSE-MIB closed 2.5 percent down while Spain shed 2.3 percent. On Wall Street, the Dow Jones industrial average fell 0.4 percent to 14,447.75. The S&P 500 closed down 0.3 percent at 1,551.69. The Nasdaq composite index dropped 0.3 percent to 3,235.30.
In return for a 10 billion euros ($13 billion) bailout from international lenders, Cyprus agreed to drastically shrink its banking sector, cut its budget, implement economic reforms and privatize state assets.
Cyprus must contribute 5.8 billion euros to the deal. To do so, the country's second-largest bank, Laiki, will be restructured and bondholders and depositors with more than 100,000 euros will have to take significant losses.
Depositors in the biggest bank, the Bank of Cyprus, with over 100,000 euros will also bear a cost but those with savings up to 100,000 euros will covered by the EU's deposit insurance guarantee.
Some analysts said, however, the deal was a short-term solution that quickly relieved a small-sized crisis that could have spiraled rapidly downward.
"Cyprus is less than 1 percent of the European Union's GDP," said Dickie Wong of Kingston Securities in Hong Kong. "But those savers and bondholders are in deep trouble."
Among individual stocks, Tomy Co. tumbled 5.1 percent after the Japanese toy maker revised down its earnings projection for the current business year ending March, Kyodo News Agency said.
Later Tuesday, the U.S. Commerce Department reports on business orders for durable goods in February. Consensus forecast is that orders rose 3.7 percent, after a 4.9 percent drop in January.
In energy markets, benchmark oil for May delivery fell was down 1 cent to $94.80 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.10 to finish at $94.81 a barrel on the Nymex on Monday.
In currencies, the euro rose to $1.2863 from $1.2851 late Monday in New York. The dollar fell to 94.12 yen from 94.16 yen.
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