Bangkok - Asian stock markets tumbled on Thursday after a ratings agency threatened to downgrade the US if a solution to the so-called fiscal cliff isn't found. But markets elsewhere turned positive following sharp losses the day before.European shares were higher in early trading. Britain's FTSE 100 rose 0.2% to 5 805.51. Germany's DAX added 0.3% to 7 254.15. France's CAC-40 rose 0.4% to 3 425.59.Wall Street was set to recoup some of Wednesday's steep losses, with Dow Jones industrial futures rising 0.3% to 12 897 and S&P 500 futures gaining 0.2% to 1 391.70.Asian stocks sank after a ratings agency threatened to downgrade the US if a solution to the so-called fiscal cliff isn't negotiated among lawmakers and newly re-elected President Barack Obama.If a deal isn't reached by January 1, tax increases and government spending cuts to the tune of $800bn automatically take effect. Some economists say such a withdrawal of fiscal stimulus has the potential to throw the world's biggest economy back into recession.Hours after Obama defeated Republican challenger Mitt Romney in a cliffhanger election, Fitch Ratings said that the US government's top 'AAA' rating would be at risk if Congress and the president did not immediately forge an agreement to avoid the fiscal cliff."There are fears that US lawmakers will repeat the same political divisiveness over key fiscal issues that led Standard & Poor's to remove America's triple-A debt rating in August 2011," said analysts at DBS Bank in Singapore in a market commentary.Japan's Nikkei 225 index shed 1.5% to close at 8 837.15. The government reported that seasonally adjusted private-sector machinery orders, excluding volatile orders for ships and utilities, fell 4.3% in September.Hong Kong's Hang Seng sank 2.4% to 21 566.91. South Korea's Kospi dropped 1.2% to 1 914.41. Australia's S&P/ASX 200 was 0.7% lower at 4 483.80. Benchmarks in Singapore, Taiwan and Indonesia also fell.In mainland China, the Shanghai Composite Index lost 1.6% to 2 071.51, while the Shenzhen Composite Index lost 2.3%t to 831.71."The losses were based on weakness abroad," said Sun Hongting, an analyst at Sinolink Securities in Shanghai. He said that "investors were disappointed that there was no sign of positive policies" announced on Thursday during the opening of China's weeklong Communist Party congress - the once-in-a-decade forum to name China's top leadership.Markets are looking for hints on how the new leadership plans to tackle the nation's economic slowdown.Another blow to investor confidence stems from corporate America's less-than-stellar third-quarter earnings reports, said Lorraine Tan, director at Standard & Poor's equity research in Singapore."Because the market was distracted by the election, it didn't really react. But people are now taking a step back and seeing that earnings weren't that great," she said."With the potential risk to GDP growth next year, I think people are saying, 'I'll take a little money off the table, because the S&P had a pretty good run.'" The Standard &Poor's 500 index is up 10.9% for the year.Among individual stocks, weak quarterly earnings drove down South Korean construction firms, Yonhap News Agency said. No 1 Hyundai Engineering & Construction fell 4% and GS Engineering & Construction plummeted 11.2%.Benchmark oil for December delivery was up 34 cents to $84.78 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $4.27 to close at $84.44 a barrel in New York on Wednesday.In currencies, the euro rose slightly to $1.2769 from $1.2767 late on Wednesday in New York. The dollar rose to ¥79.94 from ¥79.90.