SINGAPORE - World stock markets mostly fell Tuesday as renewed concern about Europe's debt crisis overshadowed the initial enthusiasm over China's decision to let its currency rise. Investor sentiment was undermined after Fitch downgraded its debt rating on BNP Paribas SA ��" the largest bank in the eurozone by deposits ��" by one notch Monday, reviving worries that Europe's sovereign debt mountain will slow growth and undermine the financial system. Fitch slashed BNP's long-term rating to AA-minus from AA on deteriorating asset quality. A fall on Wall Street overnight also dampened the mood in Asia. The Dow Jones industrial average gave up earlier gains that were triggered by China's move to loosen the yuan's two-year-old peg to the dollar. In early trading in Europe, Britain's FTSE 100 fell 0.6 per cent, Germany's DAX shed 0.2 per cent, and France's CAC-40 dropped 0.5 percent. Stock futures pointed to modest gains Tuesday on Wall Street. Japan's benchmark Nikkei 225 stock index lost 125.12 points, or 1.2 percent, to 10,112.89 and South Korea's Kospi fell 0.5 per cent to 1,731.48. Australia's S&P/ASX 200 was down 1.2 per cent to 4,558.30. Elsewhere, Hong Kong's Hang Seng index fell 0.5 per cent to 20,814.24 while the Shanghai Composite Index added 0.1 per cent. Markets in Taiwan, Singapore, Malaysia and India all fell. Analysts, meanwhile, were divided over whether China will allow significant appreciation of the yuan ��" which would give other exporting nations a competitive edge over China. Some expect China to allow only the yuan to strengthen slightly, muting any significant impact on economic growth. "The appreciation is likely to be small, perhaps just a few per cent over the remainder of the year," Capital Economics said in a report. "Those now expecting a large appreciation against the dollar, and for this to boost the global economy and ease trade tensions, will ultimately be disappointed." Other analysts still expect a stronger yuan to spark Chinese consumer demand and boost company earnings. "China's decision to de-peg is a positive for Asia and emerging market equities," Morgan Stanley said in a report. "It promotes global rebalancing by putting enhanced US dollar spending power in the hands of Chinese consumers and allows their demand to stimulate other economies." In currencies, the dollar fell to 90.78 yen from 91.04 yen in New York late Monday. The euro fell to $1.2315 from $1.2319. Benchmark crude for July delivery was down 53 cents at $77.29 in electronic trading on the New York Mercantile Exchange.