Asian stocks tumble amid global recovery doubts : Fears that global recovery could slip back into recession.

Asian stocks tumbled today as ballooning European debt and a rise in U.S. unemployment claims added to fears the global recovery could slip back into recession. European stocks slid on Thursday on debt worries and U.S. markets were hurt by data showing unemployment claims rose last week.

Oil prices hovered near $73 a barrel, adding to a big slide overnight, while the dollar continued to gain against the euro, which was at its lowest since May. Investors were pulling money out of riskier assets such as emerging market stocks and commodities amid concern about the fiscal health of deeply indebted Greece, Spain and Portugal and their ability to borrow more money.

We are getting into a situation where stimulus is needed to sustain growth but governments may not be able to finance it. If that scenario materializes, there will be nothing to save the global economy from another recession. That risk has caused a lot of stress in markets.

In the United States, the Dow Jones industrial average closed down 268.37, or 2.6 percent, at 10,002.18 after briefly trading below 10,000 for the first time in three months. That came after the Labor Department said claims for unemployment benefits rose by 8,000 to 480,000 last week, disappointing investors who hoped for a decrease. Most Asian economies have weathered the global crisis with less damage than Western countries and debt levels are lower. But many rely heavily on exports to the United States and other developed markets.

The importance of the U.S. and Europe is so large that if those major industrialized economies have a risk of recession, Asia cannot escape unscathed. We see further downside in the market from the current levels.

-JK, Lead Associate, SLT