* Technology shares sink after Intel warning reverberates
* Crumbling sentiment on risk hits emerging market
currencies
* Oil takes breather near $43 after 12 pct drop overnight
(Updates prices, adds European outlook)
By Kevin Plumberg
HONG KONG, Jan 8 (Reuters) - Asian stocks and emerging
market currencies fell on Thursday, after dire U.S. private
employment data and fears about corporate earnings cooled
investor willingness to take risks for higher returns.
Major European stocks markets were expected to fall as much
as 1.2 percent, according to financial bookmakers, following a
3 percent drop in U.S. stocks overnight.
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.
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.
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.
Stimulus aimed at infrastructure and interest rate 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 3.9 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, electronic parts maker Kyocera Corp <6971.T> was
one of the top drags on the Nikkei, sliding 6.6 percent, while
Hong Kong-listed PC maker Lenovo Group <0992.HK> sank 22
percent after warning of a quarterly loss and cutting jobs.
Taiwan's tech-heavy TAIEX index <> fell 5.3 percent
after a report on Wednesday showed a record 42 percent plunge
in exports, spurring the central bank to cut rates unexpectedly
by a half-percentage point.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> was down 4 percent.
Expectations of even slower demand for raw materials
dragged on metals prices, while U.S. crude was steady around
$42.65 a barrel <CLc1> after a surprising buildup of
inventories unleashed a brutal 12 percent selloff 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.
Singapore and Malaysia are two economies most leveraged to
demand from the developed world, according to Societe Generale
economists. The U.S. dollar rose 0.6 percent against the
Singapore dollar <SGD=> and 0.9 percent against the Malaysian
ringgit <MYR=>.
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 0.2 percent to $1.3620 <EUR=>.
The benchmark 10-year Treasury note yield <US10YT=RR> was
at 2.46 percent, down from 2.50 percent late in New York. The
30-year bond yield rose to a one-month high of 3.06 percent
<US30YT=RR> before ticking lower.
Despite the fall in U.S. yields, returns on some quality
corporate bonds were 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 <2JGBv1>
slipped to a one-month low of 138.62 after weaker-than-expected
results from a 10-year debt auction.
(Additional reporting by Koh Gui Qing in SYDNEY)
(Editing by Kazunori Takada
