* Asian shares slide 2.6 pct on earnings, economic worries
* Nikkei down for ninth day in a row, 11 pct below June
peak
* Yen steady, little reaction to Japan election news
* Crude struggles below $60 a barrel
By Lincoln Feast
SINGAPORE, July 13 (Reuters) - Asian shares fell 2.6
percent on Monday, with Japan's Nikkei down for a ninth
straight day, as concerns about company earnings outlooks
weighed, while oil languished near a six-week low as faith in a
rapid economic recovery faded.
The yen firm against other major currencies, showing little
reaction to news that embattled Prime Minister Taro Aso plans
to call a general election on Aug. 30. [].
A strong second-quarter rally, the summer holiday season in
the northern hemisphere and resurgent doubts about the strength
of the global economy have combined to dull investor appetite
for riskier assets such as stocks and commodities.
Oil prices dropped 11 percent last week in their biggest
weekly decline since late January amid mounting worries that a
economic rebound may not be coming soon to help spur flagging
fuel demand. "The market has been too optimistic about a
global economic recovery later this year, but that now looks
unlikely to happen, so oil prices are languishing," said David
Moore, a commodities analyst at the Commonwealth Bank of
Australia.
U.S. light, sweet crude <CLc1> was down 76 cents at $59.13
a barrel, within striking distance of Friday's six-week low of
$58.72.
Stocks are also in a steady downtrend.
The Nikkei average <> has now fallen 11 percent from
its late-June peak, closing down 2.6 percent at an eight-week
low on Monday. MSCI's measure of stocks elsewhere in the
Asia-Pacific <.MIAPJ0000PUS> also fell 2.6 percent but has
fared a little better this year, gaining about a quarter.
Taiwan's benchmark index <> led declines, falling 3.5
percent on concerns an upcoming financial services agreement
with China may be delayed, hurting banking shares.
Seoul's KOSPI <> was also down 3.5 percent, with
reports about the ill-health of North Korean leader Kim Jong-il
weighing.
"Speculation that Kim Jong-il is suffering from pancreatic
cancer has negatively affected markets...such news highlights
South Korea's geopolitical risks and the one thing that
investors hate is any uncertainty," said Lee Kyoung-su, a
market analyst at Taurus Investment & Securities.
[]
YEN EYES EQUITIES
The poor run for equities has affected other financial
markets, particularly the currency markets.
"Equities fell globally last week with U.S. shares falling
for the fourth straight week, and the key is whether that will
continue," one currency trader said.
The yen had risen on Friday, notching its best weekly gain
against the greenback since October, and the dollar rose
against other currencies amid fears of weak U.S. corporate
profits and fading hopes for a global recovery.
A report showing U.S. consumer sentiment soured in early
July also boosted the two currencies on Friday. The dollar and
the yen can rise if investors sell risky assets such as stocks
and commodities and buy back the low-yielding dollars and yen
used to finance those purchases.
The dollar eased to around 92.40 yen <JPY=>, inching back
in the direction of the five-month low of 91.77 yen hit on
trading platform EBS on Friday. The euro dipped 0.4 percent
against the yen to 128.58 <EURJPY=R>.
Government bonds have been the main recipient of money
flowing out of the equity and commodity markets as investors
seek a relatively safe parking place for their cash over the
summer.
Yields on two- and five- year Japanese government bonds hit
multi-year lows last week and demand remained solid on Monday.
Ten-year Japanese government bond futures <2JGBv1> edged up
to 138.89, having rallied from a low of 135.47 last month.
(Editing by Kim Coghill)
