* Tech shares selloff after Intel warning reverberates
* Crumbling sentiment on risk hits emerging market
currencies
* Oil takes breather at $42.75 after 12 pct drop overnight
(Repeating to more subscribers)
By Kevin Plumberg
HONG KONG, Jan 8 (Reuters) - Asian stocks and emerging
market currencies fell on Thursday, with a recent rebound in
investor willingness to take risks jeopardised by dire U.S.
private employment data and fears about corporate earnings.
The financial crisis of 2008 has snowballed into a global
economic crisis in 2009, with consumer spending crippled, Asian
exports collapsing and unemployment rising at an alarming rate.
"We saw a bit of hope earlier that the world may be in for
a quick recovery, but the reality is there are still a fair bit
of problems in markets," said Lucinda Chan, division director
at Macquarie Equities in Australia.
Global equity markets snapped a 10-day rally on Wednesday
after a report showed the U.S. private sector shed 693,000 jobs
in December, increasing chances the U.S. payrolls report due on
Friday will reflect greater job losses than the expected
500,000.
Discomfort with risk taking this time around has not
triggered a wholesale move into government bonds, with U.S.
Treasuries and Japanese government bonds under pressure on
concerns about how much demand investors will have for the slew
of fresh issuance needed to finance massive government resuce
programs.
Hopes that fiscal stimulus measures will support global
growth, which fed the recent stock market rallies around the
world, have been tempered by the cold, hard economic reality.
Government spending plans and interest rates cuts can take a
long time to be fully felt, and company earnings are likely to
deteriorate further in early 2009.
Japan's Nikkei share average <> fell 2.5 percent,
after stringing together its longest winning streak since one
that ended in April 2006.
Technology shares in particular were under fire after Intel
Corp <INTC.O> cut its fourth quarter sales forecast for the
second time. []
In Japan, Kyocera Corp <6971.T> was the top drag on the
Nikkei, sliding 5.5 percent, while in South Korea shares of
Samsung Electronics <005930.KS> were down 1.3 percent.
Taiwan's tech-heavy TAIEX index <> fell 2.4 percent
after a report on Wednesday showed a record 42 percent plunge
in exports, spurring the central bank to cut rate unexpectedly
by a half-percentage point.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> was down 1.8 percent, while the All-Country
World Index <.MIWD00000PUS> was down 0.65 percent after its
longest winning streak since one starting in December 2004
ended on Wednesday.
TOO EARLY FOR RECOVERY TRADES
Equity markets usually turn higher toward the end of
negative economic cycles, as investors anticipate turning
points well before they take place, sometimes six months prior.
Some analysts have cited this as a reason for the strength in
demand for stocks, high-grade credit and commodities.
However, the severity of this global slowdown makes seeing
into the future an even more treacherous task than it usually
is.
"Our judgement is that the end of the global recession
remains far enough in the future, and uncertain enough in
timing, if not depth, that it is too early to swing fully into
recovery trades," JPMorgan asset allocation strategists said in
a note.
They recommended sticking with bets on further strength in
government bonds, especially shorter maturities in Europe, as
well as on U.S. stocks since they will likely benefit from the
one-two punch of fiscal stimulus and zero interest rates.
Emerging market currencies weakened as the global equity
rally came to a halt, while commodity-related currencies came
under pressure after crude oil's biggest single-day percentage
decline in more than seven years overnight.
The Australian dollar fell 0.8 percent to US$0.7080 <AUD=>
after hitting a three-month high this week.
The U.S. dollar rose 1.9 percent against the Korean won
<KRW=> and 0.9 percent against the Indonesian rupiah <IDR=>.
The U.S. dollar recovered against the euro and other major
currencies but pinning down a trend has been difficult so early
in the year. The euro was down 0.5 percent to $1.3580 <EUR=>.
Expectations of even slower demand for raw materials
dragged on metals prices, while U.S. crude was steady around
$42.70 a barrel <CLc1> after a surprising buildup of
inventories unleashed a brutal 12 percent selloff on Wednesday.
The benchmark 10-year Treasury note yield <US10YT=RR> was
at 2.49 percent, down from 2.50 percent late in New York.
The 30-year bond yield rose to 3.05 percent <US30YT=RR>, a
fresh one-month high.
The returns on some quality corporate bonds were also
peeling investors away from the relative pittance offered by
Treasuries. For example, U.S. corporate bonds have returned
about 4.6 percent over the past month, while high-yield bonds
posted returns of about 15 percent in the period, according to
Merrill Lynch data.
The 10-year Japanese government bond future dipped 0.13
percent as dealers prepared for an auction of 10-year debt
later on Thursday.
(Additional reporting by Koh Gui Qing in SYDNEY)
