* Japan bank shares sag on Nomura $5.6 bln share offering
* Dollar up, sterling under pressure
* Reduced stimulus measures could hit risk taking
By Kevin Plumberg
HONG KONG, Sept 25 (Reuters) - Asian stocks fell and the
U.S. dollar extended gains on Friday after central banks said
they were winding down extraordinary stimulus measures, raising
fears the days of fast flowing liquidity were numbered.
Japan's Nikkei share average <> led declining equity
markets in Asia, falling 2.9 percent.
Bank shares dropped after Nomura Holdings <8604.T> said it
would raise in an equity offering up to $5.6 billion, what one
broker pointed out was 24 times its average daily turnover.
[]
The first inflows to money market funds in eight weeks,
pronouncements from the Chinese that the world needs to begin
preparing stimulus exit strategies and comments from a Federal
Reserve official that rates may need to rise have contributed
to profit taking in equities and bets against the dollar.
[]
While the overall level of liquidity in most economies is
abundant, the prospect of reduced stimulus sent some dealers to
lock in profits ahead of the outcome of a G20 meeting in
Pittsburgh, in which rebalancing the global economy was a
focus.
"Markets are fragile at the moment and there was a visible
announcement effect -- markets afraid that as liquidity is
mopped up, then some risk appetite may go with it," said Adam
Carr, senior economist at ICAP Australia.
SHARES BROADLY DOWN
The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> slipped 0.9 percent after touching a 13-month
high on Wednesday. The materials and IT sectors were the
hardest hit while the energy and telecom sectors outperformed.
A Thomson Reuters index of regional shares <.TRXFLDAXPU>
was down 0.8 percent.
The MSCI all-country world index <.MIWD00000PUS> is down
1.9 percent so far this week, on track for the biggest weekly
decline since the week of July 12. The index is up 25 percent
year-to-date, but the likelihood that economic news will
continue to deliver positive surprises and trigger more buying
was smaller.
"Our trading stance remains 'pro-risk,' reflecting our view
that this pullback -- like those before it -- will likely be
temporary," said Dominic Wilson, director of global macro and
markets research with Goldman Sachs, in a note.
"But industrial news is undershooting a bit lately relative
to high expectations and it is less clear what will take the
market higher in the very near-term."
Despite an eight-week streak of outflows from safe haven
money market funds being broken, equity funds took in $5.42
billion in the week to Sept. 23, with emerging market equity
funds having their biggest week of inflows since early June,
fund tracker EPFR Global said in a note. []
In currency markets, the dollar was up against most major
currencies except the yen. The euro was down 0.1 percent to
$1.4640 <EUR=> after climbing to the highest in a year above
$1.48 on Wednesday.
Sterling continued to be an open target after Bank of
England's Mervyn King said on Thursday that a weak currency was
helping the domestic economy. After dropping 1.8 percent on
Thursday, the pound fell a further 0.8 percent to $1.5943
<GBP=>.
U.S. Treasuries were steady after a rush out of equities on
Thursday weighed on yields. Japanese government bonds gained
after the overnight Treasuries rally, with the December 10-year
JGB future <2JGBv1> up 0.25 point after earlier hitting the
highest since Sept 15.
U.S. crude futures recovered after tumbling over 4 percent
to an eight-week low the previous day when weak U.S. home sales
increased fears about the pace of economic recovery in the
world's top oil consumer nation.
U.S. crude for November delivery <CLc1> was up 0.7 percent
at $66.34 a barrel, after settling down $3.08 on Thursday, when
the housing data added to demand worries following a report
earlier in the week of a large build in oil stockpiles.
(Additional reporting by Wayne Cole in SYDNEY; Editing by
Jeremy Laurence)
