Investors monitor and trade stocks at a securities exchange in Shanghai. Air China Ltd tumbled 14 percent on the Hong Kong stock market as unrest in Libya drove fuel prices above $100 a barrel for the first time in two years. [Photo / Bloomberg]

SYDNEY - Asian stocks fell last week amid concern instability in the Middle East and North Africa may derail a global economic rebound, reversing gains the previous week on signs the recovery was strengthening.

Hyundai Engineering & Construction Co, which gets 38 percent of sales from the Middle East, sank 6.2 percent in Seoul. Qantas Airways Ltd, Australia's largest airline, slumped 6.3 percent in Sydney and Air China Ltd tumbled 14 percent in Hong Kong as unrest in Libya drove fuel prices above $100 a barrel for the first time in two years. Toyota Motor Corp, the world's largest carmaker, fell 3.4 percent in Tokyo.

"Share prices will have a tough time rebounding as long as investors have their eyes on the risks stemming from the uncertainty in the Middle East," said Kenji Sekiguchi, general manager at Mitsubishi UFJ Asset Management Co, which oversees about $75 billion.

The MSCI Asia Pacific Index dropped 2.1 percent to 136.86 last week as Middle East rulers attempted to contain uprisings that have overthrown leaders in Tunisia and Egypt and spread to Bahrain, Yemen and Libya. That rolled back the previous week's 3 percent gain after US and Japanese central banks raised their growth outlooks and companies posted better-than-estimated earnings.

Japan's Nikkei 225 Stock Average fell 2.9 percent last week; Australia's S&P/ASX 200 Index lost 2 percent; while South Korea's Kospi Index and Hong Kong's Hang Seng Index sank 2.5 percent. China's Shanghai Composite Index retreated 0.7 percent.

Related readings:  Investors see bullish trend in the price of oil  Middle East tensions hit the markets  Stock markets across Asia fall sharply  Libyan unrest drives stock decline

"There's uncertainty about what's going on in the Middle East," said Yasushi Noguchi, a strategist in Tokyo at SMBC Friend Securities Co. "Investors will increasingly be taking a wait-and-see stance."

Hyundai Engineering slumped 6.2 percent to 75,500 won ($67.95) in Seoul. Samsung Engineering Co, which won contracts in Bahrain and Saudi Arabia this month, dropped 4.6 percent to 187,500 won. Chiyoda Corp, a contractor that gets almost half of its income from the Middle East, sank 4.5 percent to 721 yen ($8.80) in Tokyo. Airline stocks and carmakers slumped as oil traded near the highest in more than two years amid concern crude supplies will be disrupted by the turmoil in the Middle East and North Africa.

Qantas plunged 6.3 percent to A$2.38 ($2.42) in Sydney as the risk of higher fuel prices curbed the earnings outlook for airlines. Cathay Pacific Airways Ltd sank 9.6 percent to HK$17.70 ($2.27) in Hong Kong. Air China Ltd, the world's biggest carrier by market value, tumbled 14 percent to HK$7.04. Toyota fell 3.4 percent to 3,755 yen in Tokyo.

"We're having a natural reaction to the unrest with oil going above $100," Todd Martin, Societe Generale's Asia equity strategist, said in a Bloomberg Television interview in Hong Kong last week.

The MSCI Asia Pacific Index is little changed this year.

Bloomberg News