* Financials, consumer goods lead Asia ex-Japan shares down
* Pound pressured after G7 silence on recent weakness
* Investors flocking to U.S. corporate bonds - EPFR
By Kevin Plumberg
HONG KONG, Feb 16 (Reuters) - Asian stocks came under
modest pressure on Monday, with dismal economic data and doubts
about prospects for the financial industry outstripping
investor relief that a U.S. economic stimulus bill had finally
passed.
The British pound fell, particularly against the yen, after
the Group of Seven rich nations meeting over the weekend passed
without public mention of sterling's sharp weakness or the
yen's persistent strength.
The yen remained firm despite a report showing Japan's
economy shrank by the most since 1974 in the fourth quarter of
2008 compared with the previous three months, weighing on the
Nikkei share index. The global economy fell off a cliff at the
end of last year, further confirmed after a report last week
showed a record contraction in the euro zone economy.
"There is negative sentiment as the U.S. and European
financial sectors remain under strain. There is still a fair
amount of negative news out there," said Dominic Vaughan,
senior dealer at CMC Markets in Australia.
The Nikkei <> slipped 0.2 percent in choppy trade,
with technology-driven companies like Kyocera Corp <6971.T> and
TDK <6762.T> among the biggest drags on the index.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> dropped 1.7 percent, with financials, consumer
staples and materials sectors the largest reasons for weakness.
Hong Kong's Hang Seng index declined 2 percent, led by a
3.3 percent drop in HSBC stock <0005.HK>. Shares of Bank of
East Asia were the top percentage loser, down 5 percent, ahead
of annual results due on Tuesday, with analysts expecting a 90
percent drop in profits.
The benchmark S&P/ASX 200 index <> in Australia fell
0.8 percent, with bank stocks under fire.
WAITING GAME
Investors to some extent have to just sit and wait for
varied government stimulus packages to filter to through to
businesses and families. []
U.S. President Barack Obama will sign a $787 billion
economic stimulus package of tax cuts and infrastructure
investment on Tuesday after weeks of acrimonious debate, while
Japanese Economics Minister Kaoru Yosano said the government
was not considering additional stimulus action until a budget
for the current fiscal year is passed. []
Even as investors played a waiting game, doubts lingered
about a fix for the bank industry, still suffering from a
drought of confidence and fears about landmines on their
balance sheets.
In terms of asset allocation, global investors have largely
been focused on scooping up bargains in U.S. corporate bonds
and hoping for growth in Chinese equities.
Greater China equity funds saw the most capital inflow last
week since late April 2008 while U.S. bond funds took in fresh
money for a sixth straight week, according to Boston-based
research firm EPFR Global.
"The second week of February offered investors little to
cheer about," EPFR said in a note. "But, as has been the case
for the past three months, the latest flow data contained some
bullish signals," citing new money in high yield bond funds and
outperforming U.S. equity funds centered on growth.
The new U.S. bank rescue plan that would potentially cost
$2 trillion was greeted unceremoniously by investors last week,
frustrated by the lack of detail, especially with regard to how
the banks' illiquid assets will be valued.
Not much action came out of the weekend's G7 meeting,
though the policymakers in a statement softened their tone on
the Chinese yuan and did not single out either the yen or
sterling.
The dollar was at 91.64 yen <JPY=>, down 0.25 percent from
late U.S. trading on Friday. The euro dropped 1 percent to
117.28 yen <EURJPY=R>.
Against the yen, sterling was down more than 1 percent at
130.41 <GBPJPY=R>.
U.S. crude futures <CLc1> rose 38 cents to $37.93 a barrel,
extending a 10 percent rise on Friday, on hopes energy demand
will pick up sooner rather than later after passage of the U.S.
economic stimulus package.
