* S.Korea stocks lead region lower, won tumbles
* Nikkei at 3-mth intraday low, as "sell Japan" view
spreads
* Investors growing numb to dire data, policy actions
By Kevin Plumberg
HONG KONG, Feb 20 (Reuters) - Asian stocks slid and the
U.S. dollar rose on Friday as investors chose safety on
evidence the global economy remains in difficulty and the
nationalisation of more banks in the developed world is
increasingly likely.
South Korea was a sore point in the region, with shares
there leading the region lower and the won currency at its
weakest since late November on fears local banks may
increasingly struggle to access overseas capital markets.
The deluge of rescue packages and emergency spending from
policymakers globally to support their deteriorating economies
has numbed investors and even U.S. President Barack Obama's
$275 billion plan to prevent foreclosures was largely shrugged
off. []
On the flip side, investors are also becoming more
accustomed to the horror show of economic data around the
world. Plummeting exports in Asia have sliced into total
output, consumer spending in the developed economies shows no
sign of life and unemployment is surging.
That keeps investors focused on maintaining a low exposure
to risk by holding assets such as gold, U.S. Treasuries and the
dollar.
"There has been nothing of good news on the global economic
front for some time and even the shock value of truly horrible
data appears to have faded," said Patrick Bennett, Asia foreign
exchange and rates strategist with Societe Generale in Hong
Kong said.
South Korea's KOSPI <> fell 2.6 percent while Hong
Kong's Hang Seng <> slid 2.4 percent in early trade. Shares
of Samsung Electronics <005930.KS> and China Mobile <0941.HK>
were the heaviest drags on their respective indexes.
Japan's Nikkei average <> fell 1.35 percent to a fresh
3-month intraday low. The broader TOPIX index <>
threatened to break a low from last October, which would bring
it to the lowest in a quarter of a century.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> fell 1.4 percent on Friday, edging back toward
a one-month low hit on Wednesday. The raw materials and
financial sectors were the biggest losers on the day.
ASIA'S PROSPECTS
However, the 4 percent drop in the index so far in February
has not been as bad as the all-country world index, which is
down 5.75 percent.
While that's not a huge gap, it coincides with cross-border
portfolio flows data reflecting a steady move into greater
China equities and anecdotes from asset managers that Asia
continues to be their long-term favourite in terms of
geographic preference.
Garry Evans, pan-Asia strategist for HSBC in Hong Kong,
said one of the biggest risks to the region is if the cash
crunch in eastern Europe becomes more severe and hurts investor
views on emerging markets in general.
Evans said besides Korea, Asia has a much healthier
financial sector and high savings, which makes it an attractive
long-term investment. However, given the way markets remain
highly sensitive to risk, Asia is not in the clear, yet.
"The biggest risk for Asia, then, is one of sentiment. If
conditions do continue to deteriorate for eastern European
markets -- even to the extent that they trigger intervention by
the IMF or EU -- this is likely to sour global investors views
on emerging markets in general," he said in a note.
In currency markets, the Korean won tumbled against the
dollar as foreign investors dumped domestic stocks.
The dollar jumped 1.3 percent to 1,500.1 won <KRW=>, on
track to extend a winning streak to nine days despite
assurances from Korean officials that the country's foreign
debt refinancing needs are manageable. []
The dollar was broadly resilient, benefitting from a rush
to liquidity. The euro fell 0.4 percent to $1.2622 <EUR=>
though it remained well off a three-month low around $1.2510
reached on Wednesday.
U.S. Treasuries rose with futures pointing to a lower open
on Wall Street later in the day and after declining in the U.S.
session on expectations of a glut of new supply.
The yield on the benchmark 10-year Treasury note
<US10YT=RR>, which moves in the opposite direction to the
price, slipped to 2.82 percent from 2.86 percent late in New
York on Thursday.
Caution was the key word in the commodities market.
Spot gold prices rose slightly to $975.80 an ounce after
climbing on Thursday to the highest since July, at $985.95. For
many analysts, the target in the near term is $1,000.
Holdings in both gold and silver exchange-traded funds
<GLD><SLV.P>, which are often used by funds, both hit records.
U.S. crude futures for March delivery <CLc1>, which expire
later in the day, fell 76 cents to $38.72 a barrel, after
posting overnight the biggest settlement gain since Dec. 31.
April delivery contracts <CLc2> fell 81 cents to $39.37,
while London Brent for April delivery <LCOc1> dropped 55 cents
to $41.44 a barrel.
"There's a bit of profit-taking. Traders were looking for
any reason to buy up. If we see another piece of bad economic
news prices will come back down again," said Gerard Rigby, an
analyst at Fuel First Consulting in Sydney.
