Asian markets drop in early trade

Asian stock markets tumbled Monday, dragged down by weak US employment figures and fresh fears that Europe's debt crisis could spread as Hungary scrambled to calm worries that the nation is close to defaulting on its debts.

Japan's benchmark Nikkei 225 stock average plunged 396.95 points, or 4 percent, to 9,504.24 with investors also cautious before Japan's new leader, Naoto Kan, forms his Cabinet on Tuesday.

South Korea's Kospi lost 2.6 percent to 1,621.67 while Australia's S&P/ASX 200 was down 3.1 percent at 4,335.90. Hong Kong's Hang Seng dropped 2.9 percent to 19,211.67. Benchmarks in mainland China, Singapore and Taiwan also fell sharply.

Selling spread in Asia on fears that Europe's debt problems could spread after Hungarian officials said last week the nation was at risk of a Greek-style fiscal crisis.

The comments shocked investors, pushing the euro to a fresh four-year low against the dollar. Hungary is part of the European Union, but keeps its national currency - the forint, which dropped around 5 percent last week.

Hungarian officials scrambled to calm market worries, insisting Saturday recent comments were "exaggerated."

Benchmark crude for July delivery was down $1.46 at $70.05 a barrel in electronic trading on the New York Mercantile Exchange.