Asian stocks fell on concern that Europe may be unable to halt the spread of its sovereign-debt crisis, denting the outlook for the global economy. The regional benchmark pared declines after Hong Kong briefly reversed losses.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender by market value, declined 2.7 percent after the cost of insuring against default on European sovereign and financial debt surged to records.BHP Billiton Ltd., the world’s No. 1 mining company, slumped 2.2 percent after commodity prices declined. Kansai Electric Power Co., a Japanese nuclear-power operator, jumped 3.5 percent after the country’s new leader indicated atomic power will continue to be used.

The MSCI Asia Pacific Index pared losses after Hong Kong’s Hang Seng Index briefly reversed a 1.7 percent loss, led by banks and property developers, as European markets opened higher after yesterday’s rout. The Asia-Pacific gauge fell 1.5 percent to 118.95 at 4:31 p.m. in Tokyo, with almost five stocks falling for each that rose.

Japan’s Nikkei 225 Stock Average decreased 2.2 percent. South Korea’s Kospi Index retreated 1.1 percent. China’s Shanghai Composite index dropped 0.3 percent after swinging between losses of 0.8 percent and a gain of 0.1 percent.

Asia-Pacific measure slumped 8.6 percent last month, the most since May 2010, amid concern global economic growth is slowing as Europe’s sovereign debt crisis spreads and after Standard & Poor’s cut the U.S. credit rating.

“It’s another market riot,” said Nader Naeimi, a Sydney- based strategist for AMP Capital Investors Ltd., which manages almost $100 billion. “Volatility is likely to remain high until there’s clarity around Europe’s ability to work out a lasting solution. Right now, it seems policy makers are going in the opposite direction. While the fundamentals in Asia are in better shape than elsewhere, shares here will get caught up in the crossfire.”