* Stocks markets on track for worst quarter since Q4 2008
* Euro hits record low vs Swiss franc on funding concerns
* U.S., Japanese government debt yields fall
* Oil steady as storm seen missing key U.S. Gulf facilities
By Alex Richardson
SINGAPORE, June 29 (Reuters) - Asian stocks fell on Tuesday
and were on course for their worst quarterly performance since
the end of 2008, while funding concerns in the euro zone sent
the single currency tumbling to a record low against the Swiss
franc.
The tepid nature of the rich world's recovery from global
recession kept investors on the defensive, with a general
flight to relative safe havens prompting a rebound for gold and
falls in U.S. and Japanese government debt yields to
multi-month lows.
European shares were also expected to fall, with financial
bookmakers forecasting the benchmark indexes in Britain, France
and Germany to open down 0.8-1.2 percent. Eurostoxx 50 Futures
<STXEc1> slid 1.7 percent. []
Chinese stocks <> fell 4 percent to a 14-month low, as
investors started pulling funds from the market to prepare for
a major initial public offering by Agricultural Bank of China,
pointing to tight liquidity in China's markets. []
"The market is still facing financing pressures and we are
still worried about the domestic economy," said Zheng Weigang,
an analyst at Shanghai Securities.
Tokyo's Nikkei <> fell 1.3 percent to a three-week
closing low and MSCI's broadest index of Asia-Pacific shares
outside Japan fell 1.6 percent.
The Nikkei has fallen around 14 percent in the second
quarter and the MSCI AP ex-Japan is down roughly 8 percent,
putting both on track for their worst quarterly performance
since the meltdown in the final months of 2008 following the
collapse of Lehman Brothers.
World stock markets rebounded strongly in 2009, but
investors are now fretting about the uncertainty of the outlook
as governments -- many facing ballooning debt burdens -- start
to turn off the stimulus that supported the fledgling recovery.
EURO WOES
The euro fell around 1 percent against the yen <EURJPY=R>,
dragged down by losses against the Swiss franc. It fell 0.2
percent on the day to touch 1.3323 francs <EURCHF=> on trading
platform EBS, the weakest since its launch in 1999.
The pair has now lost 4 percent since June 17, when the
Swiss central bank backed off from a pledge to fight excessive
appreciation in the franc.
Traders in Asia said investors were wary of growth-linked
currencies and the euro amid festering problems in the euro
zone, where funding pressures re-emerged with interbank lending
rates hitting their highest in almost seven months on Monday.
Banks must repay 442 billion euros ($545.5 billion) to the
European Central Bank on Thursday, leaving a potential
liquidity shortfall in the financial system of more than 100
billion euros. []
The premium investors demand to hold 10-year Italian,
French and Spanish government bonds, rather than euro zone
benchmark German Bunds, all widened.
"Renewed debt stress stories...have weighed a bit on the
euro and led to renewed safe-haven parking in the yen and Swiss
franc," said dealer at a Swiss bank.
"Investors' sentiment towards peripheral Europe remains
cautious and fragile to say the least."
The search for safer assets pushed the U.S. benchmark
10-year yield <US10YT=RR> to its lowest since April 2009, while
the benchmark Japanese Government Bond 10-year yield
<JP10YTN=JBTC> fell to a seven-year low. [] []
Concerns about Europe's debt burden contributed to a
rebound for gold <XAU=>, with spot prices for the safe-haven
metal rising more than $3 to $1,239.20 an ounce. []
"Gold is likely to remain pretty well supported in the
current quarter. Safe-haven demand for gold remains prominent,"
said David Moore, a commodity strategist at Commonwealth Bank
of Australia in Sydney.
The euro's weakness -- and consequent relative dollar
strength -- also contributed to falling in oil prices, making
dollar-denominated crude more expensive for buyers in Europe
and Asia.
Oil <CLc1> fell nearly 1 percent to $77.53 a barrel, as
forecasts indicated Tropical Storm Alex was likely to skirt the
main production region in the U.S. Gulf of Mexico. []
"Markets are concerned that European banks are pressed to
pay 442 billion euros. If these worries sustain and the euro
falls, a stronger dollar would pressure oil prices down," said
Serene Lim, a Singapore-based oil analyst at ANZ Bank.
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