* Stocks fall on worries U.S. bank rescue plan won't work
* Yen gains as market volatility climbs
* Hong Kong stocks snap 5-day winning run
* Saudi Arabia's Naimi warns of spikes in oil market
(Repeats to additional subscribers)
(Updates prices, recasts, adds European outlook)
By Kevin Plumberg
HONG KONG, Feb 11 (Reuters) - Asian stocks fell, led by
financials and energy shares, and the yen strengthened on
Wednesday, with scepticism rife about a new plan from
Washington to fix banks that could cost as much as $2 trillion.
Major European stock markets were expected to open down as
much as 1.3 percent, according financial bookmakers, after
Credit Suisse Group <CSGN.VX> posted its biggest annual loss
ever and announced job cuts.
Details were in short supply about the U.S. Treasury's
revamped rescue plan, particularly on how to value highly
illiquid securities, sending disappointed investors searching
for safety in assets such as gold after Wall Street dove 4
percent overnight. []
A $838 billion economic stimulus bill passed the U.S.
Senate but faced further congressional dealmaking that could
stretch into next week before it becomes a law.
With trade protectionism a creeping fear in Europe and
exports in Asia collapsing, uncertainty overwhelmed markets and
weighed on commodity prices. [] [] A
report showed China's imports and exports falling sharply for a
third straight month.
"The market has been willing to look for signs of
stabilisation and less fast deceleration in economic activity,
but it remains vulnerable to a setback in terms of economic
numbers or a sense that policymakers are not going to provide
the clarity that will remove longer-term uncertainties," said
Tony Morriss, senior currency strategist with ANZ Bank in
Australia.
The MSCI index of stocks in Asia Pacific outside Japan fell
1.9 percent <.MIAPJ0000PUS>, down for a second day. Japan's
markets were closed for a public holiday.
South Korea's KOSPI <> finished 0.7 percent lower,
with shares of Shinhan Bank <055550.KS> and Woori Bank
<053000.KS> among the heaviest drags on the index.
Hong Kong's Hang Seng <> dropped 3.25 percent and was
the biggest decliner in the region after it snapped a five-day
winning streak. Shares of index heavyweight HSBC <0005.HK>,
Europe's biggest lender, were down 4.8 percent.
Sinopec Corp <0386.HK> saw its stock drop 5.8 percent after
oil tumbled further below $40 a barrel overnight.
STRONG SHOCK
Regional stocks had risen some 9 percent in the last two
weeks, largely ignoring a raft of negative news, on optimism
about the White House bank rescue and on hopes that falling
global industrial output may be close to bottoming out. But
those hopes were fizzling quickly.
"The economic shock is so strong that policy reactions can
only buffer its impact, but the outlook for the coming months
remains very challenging, and further correction of asset
prices ... is likely to happen in coming months," said
Sebastien Barbe, a currency strategist with Calyon in Hong
Kong.
"We still expect most currencies in Asia to correct by
about 10 percent versus the U.S. dollar in the coming three
months," he said in a note.
The yen climbed broadly, setting off automatic orders to
sell other currencies, exaggerating price action in thin
trading conditions.
The U.S. dollar was down 0.6 percent at 89.97 <JPY=>, while
the euro fell 0.65 percent to 116.13 yen <EURJPY=>.
Gold <XAU> was down 0.3 percent to $912.10 an ounce after
jumping more than 2 percent overnight as market volatility
increased, while copper traded in Shanghai <SCFc3> dropped by
its daily limit of 5 percent, ending six-day string of gains.
Oil prices ticked up 55 cents to $38.10 a barrel <CLc1>
after tumbling $2.01 overnight.
Ali al-Naimi, Saudi Arabia's oil minister, warned of
further erratic market action because prices were in his view
unjustifiably low. "If today's low prices continue long enough,
they will sow the seeds for future price spikes and
volatility," he said in a keynote address to the CERAWeek
conference in Houston. []
In the bond market, the benchmark 10-year U.S. Treasury
yield <US10YT=RR>, which moves in the opposite direction of the
price, ticked up to 2.82 percent from 2.81 percent overnight.
The yield tumbled 18 basis points overnight after the
unveiling of the bank rescue plan.
(Additional reporting by Chris Baltimore in HOUSTON)
(Editing by Kazuori Takada)
