GLOBAL MARKETS-Asia stocks slide ahead of G20, dollar steady

                                
  * Stocks down 4th day, focus on regulations, recovery
                                
 * Japan's Nikkei closes below 25-day moving average
                                
 * Leading indicators sew caution about second half outlook
                                
 By Kevin Plumberg
                                
 HONG KONG, June 25 (Reuters) - Asian stocks fell for a
fourth straight session on Friday, driven by expectations of
tighter financial regulation ahead of the weekend G20 meeting
and uncertainty about the global economic recovery.
                                
 Major European stocks were expected to edge up as much as
0.5 percent after three days of selling, financial bookmakers
said, though investor conviction was low after discouraging
outlooks from U.S. retailers overnight.
                                
 Part of the weakness in Asia was attributable to
profit-taking after a powerful rally in risky assets on Monday
on the back of China's decision to unpeg the yuan.
                                
 However, differences among Group of 20 leaders ahead of a
summit in Toronto over how to secure the economic recovery
caused investor concern, particularly with leading indicators
reflecting a slowdown ahead. [ID:nN24260273]
                                
 "The fundamental backdrop has not significantly changed of
late, which could mean risk aversion persists as we finish the
first half of the year," Gareth Berry, currency strategist with
UBS in Singapore, said in note.
                                
 "Risk sentiment could remain unstable as investors may be
increasingly worried on growth prospects in the U.S., which
could weigh on demand conditions for commodities and equities
in turn."
                                
 Japan's Nikkei share average <.N225> led equity market
declines in Asia, falling 1.9 percent to close below its 25-day
moving average in what was seen as a negative short-term signal
for Japanese stocks. Index heavyweights such as Fanuc <6954.T>
and Canon <7751.T> saw their shares drop 4.6 percent and 4.5
percent, respectively.
                                
 The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> fell 1.4 percent, dragged down the most by the
technology and resource-related sectors.
                                
 Financials outperformed slightly on the day though not on
the week, with talk of a bank tax expected to be among the
topics discussed at a G20 summit in Toronto over the weekend.
                                
 For the week, the Asia-Pacific index was largely unchanged.
In a reversal of sectoral performance for most of the year, the
industrial and materials segments, which includes mining
stocks, outperformed, while IT was the biggest underperformer.
                                
 TOUGHER RULES FOR BANKS?
                                
 Australian miners such as BHP Billiton <BHP.AX> were down.
The industry got a boost on Thursday after a dramatic slide in
support for the government, largely because of a 40 percent tax
on mining companies, ushered into power a new prime minister
for Australia. [ID:nSGE65O00M]
                                
 Hong Kong's Hang Seng <.HSI> was down 0.6 percent, with
HSBC <0005.HK> biggest drag on the market.
                                
  U.S. lawmakers on Friday neared a breakthrough in their
historic rewrite of financial regulations, agreeing to tough
new limits on banks' trading activity and even floated a
compromise on the stubborn issue of derivatives.
[ID:nN25155960]
                                
 U.S. stocks <.SPX> ended about 1.7 percent lower overnight
and have dropped nearly 4 percent this week, underperforming
European <.FTEU3> and Japanese <.N225> shares by a wide margin.
Retailers and banks were under pressure throughout the session.
                                
 With world leaders increasingly speaking about fiscal
austerity, investors have seriously questioned the implications
for growth.
                                
 Indeed, U.S. new home sales plunged by a record 33 percent
in May from April and the Baltic Exchange's sea freight index
<.BADI>, which is used as a leading economic indicator, was
down 39 percent so far in June, on track for the biggest
monthly decline since October 2008.
                                
 Goldman Sachs economists said in a note that global growth
will slow to a 4 to 4.5 percent pace in the second half from a
5 to 5.5 percent quarter-on-quarter annualised pace in the
first half.
                                
 Currencies were hemmed into tight trading ranges on Friday,
with the euro at $1.2335 <EUR=>, well off a four-year low of
$1.1875 hit on June 7.
                                
 Beijing set the yuan's daily mid-point <CNY=SAEC> at the
highest since the July 2005 revaluation, pushing it up 0.6
percent this week. However, market reaction was limited, with
many traders resigned to the view that the yuan's appreciation
in the spot market <CNY=CFXS> will be slow and managed.
                                
 Oil <CLc1> and copper <CMCU3> both drifted lower on
concerns about the economic growth outlook, while gold <XAU=>
also eased as early buying linked to weak stock markets
subsided.
 (Editing by Lincoln Feast)