(Refiles to fix garble in paragraph 10)
* Broker comments, IMF view on toxic assets cause caution
* Benchmark Asia ex-Japan share index hits resistance
* Yen, U.S. dollar gain as risk taking is set aside
* Australia dollar stable with modest cuts seen ahead
By Kevin Plumberg
HONG KONG, April 7 (Reuters) - Asian stocks slid on
Tuesday, snapping a five-day rally as concerns about the health
of U.S. banks resurfaced, while expectations that Australian
rates would not fall much further kept the Australian dollar
steady.
European stock market futures <STXEc1> pointed to a higher
open, with investors hoping the U.S. results season will not be
so dire.
Gloomy comments from high-profile U.S. bank analysts
overnight, as well as a dark prognosis on the financial system
from billionaire investor George Soros, weighed on Wall Street
and supported gold prices. []
Adding to unease about the financial sector, the
International Monetary Fund is expected to report in coming
weeks that U.S. bad assets could climb to as much as $3.1
trillion, far more than the $2.2 trillion the institution had
earlier forecast, The Times newspaper reported. []
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> fell 1.25 percent, after briefly touching a
six-month high on Monday. The index, now at 264.20, has not
been able to clear 270 since October 2008.
In Japan, shares of top bank Mitsubishi UFJ Financial Group
<8306.T> were down 1.2 percent and Shinsei Bank <8303.T> was
off 4.4 percent.
The Nikkei share average <> slipped 0.3 percent, with
weakness in bank stocks winning out over strength in automaker
shares, which have continued to gain on hopes General Motors
<GM.N> will be able to avoid an industry-splintering collapse.
The global banking system and financial markets are likely
to remain on shaky ground, impeding hopes for economic
recovery, until the mountain of bad loans, mortgages and
financial derivatives is cleared.
"The market's stance on banks had been too optimistic
recently," said Nagayuki Yamagishi, a strategist at Mitsubishi
UFJ Securities in Tokyo. "Some large U.S. banks have already
passed stress tests, but others haven't, and given that results
are coming up soon, this simply reignited investor
uncertainty."
Bank stocks were also under fire in Australia, where
National Australia Bank <NAB.AX> dropped 2.3 percent and
Macquarie Group Ltd <MQG.AX> was down 4 percent.
The benchmark S&P/ASX 200 index <> fell 1.2 percent
after hitting a three-month high on Monday.
Hong Kong's Hang Seng index <> slid 1.1 percent, led by
HSBC stock <0005.HK>, which dropped 1.7 percent.
Even before the comments on banks, stock traders wondered
when the market would pause for breath after a 10 percent rally
in the last five days pushed a benchmark Asia ex-Japan equities
index up against a major technical obstacle on the charts.
RBA CUTS WITH FOCUS ON EMPLOYMENT
Australia's central bank surprised some in the market by
cutting rates by a quarter point, disappointing some who had
thought recent data warranted a more aggressive move.
The Australian government bond yield curve <AUBMK=>
flattened slightly and the swaps market <AUIRS> still reflected
expectations of additional easing to 2.25 percent from the
current 3 percent, though the pace would be slower than the
last eight months, easing some pressure on the currency.
"The correct way to interpret the move (by the RBA) is that
it is a one-off move reflecting risks employment data weakens
from here. I don't see this as being bad news for the
Australian dollar right now," said Robert Rennie, currency
strategist at Westpac, said in the Reuters Markets Buzz chat
room.
The Australian dollar was at $0.7123 <AUD=>, nearly
unchanged on the day, having gained some 7 cents since
February.
The U.S. dollar slipped 0.4 percent to 100.60 yen <JPY=>,
after rising above 101.40 yen on Monday, the highest since late
October, as equities slid.
The dollar has strengthened by some 12 yen since February,
as more investors dump what has been considered relative safety
in the yen for higher returns elsewhere.
"The relationship has been firmly set that the U.S. dollar
strengthens during episodes of risk aversion. Last week's rally
in equity markets was certainly of questionable sustainability
given it was in part fuelled by changes to accounting law,"
said Ashley Davies, currency strategist with UBS in Singapore
in a note.
Gold prices rose 0.9 percent to $877 an ounce in the spot
market after hitting a near three-month low on Monday.
U.S. crude for May delivery rose 1 percent to $51.58 a
barrel ahead of weekly U.S. inventories data. Oil prices have
been tracking rallying equity markets and have gained around
$15 since mid February.
The U.S. government bond market continued to be mostly
governed by expectations about upcoming supply and whether
demand would hold up.
The yield on the U.S. benchmark 10-year note <US10YT=RR>
was at 2.91 percent, dipping from 2.94 percent where it ended
New York trade.
