(Adds European markets, details, quote, updates prices)
By Louise Heavens
SINGAPORE, March 27 (Reuters) - Asian stocks fell on
Thursday as financials slipped on concerns over bank earnings,
and the dollar hovered near a record low after a drop in U.S.
durable goods signalled the world's top economy is in a
recession.
Gains in commodities boosted shares in resources companies,
such as Japan's Sumitomo Metal Mining <5713.T> and Australia's
BHP Billiton <BHP.AX>, helping lift some indexes off earlier
lows.
European markets were set to open lower on further signs
the U.S. economy is flagging, and worries that there will be
more bank write-downs after a slew of downgrades on U.S. bank
earnings.
Financial bookmakers in London forecast Britain's FTSE 100
<>, Germany's DAX <>, and France's CAC-40 <> to
open around 0.4 percent lower.
Bank shares, such as Japan's Mitsubishi UFJ <8306.T> and
Australia's Macquarie Group <MQG.AX>, were among the biggest
fallers, following the bank downgrades, a profit warning from
Deutsche Bank <DBKGn.DE> and comments from European central
bankers that there was no end in sight to the global credit
crunch. [] []
"Over the foreseeable future, there is no doubt that we'll
see a slowdown in the rate of loan growth, an element of margin
compression and an increase in the level of bad debts," said
Angus Gluskie, portfolio manager at White Funds Management in
Australia.
"Those three factors certainly mean that bank earnings will
be less than expectations people had a few months ago."
Tokyo's Nikkei <> closed 0.8 percent lower, recouping
some of an earlier near-2 percent drop, but still pressured by
weaker exporters such as Honda Motor Co Ltd <7267.T> as the
stronger yen promised to erode their profits.
MSCI's index of other Asian shares <.MSCIAPJ> fell 0.5
percent by 0612 GMT, taking its losses so far this year to
around 14 percent.
Seoul's KOSPI <> and Sydney's S&P/ASX 200 index
<> both shed 0.2 percent, while Taipei's TAEIX <>
dropped 1.9 percent and Shanghai <> sank 3.4 percent.
Hong Kong's Hang Seng <> was a bright spot, rising 0.4
percent on reassuring earnings from conglomerate Hutchison
<0013.HK> and property group Cheung Kong <0001.HK>.
OIL AT $106
Oil traded above $106 dollars a barrel after a U.S.
government report showed larger-than-expected drops in fuel
stocks and declining fuel production in the world's top oil
consumer. []
U.S. crude oil futures <CLc1> added 41 cents to $106.33,
while London Brent <LCOc1> traded at $104.38.
The dollar edged up but stayed within striking distance of a
record low versus against the euro after the European Central
Bank president's remark that euro zone rates were at the right
level cooled expectations for a near-term ECB rate cut.
U.S. short-term interest rate futures indicate investors
see around a 40 percent chance of the Fed cutting interest
rates by 50 basis points in April. A 25 basis-point rate cut is
fully priced. <FEDWATCH>
Against the yen, the dollar traded at 98.93 yen <JPY=>. The
U.S. currency hit a 13-year low of 95.77 yen on EBS early last
week. The euro <EUR=> traded at $1.5805 against the dollar.
Japanese government bond futures were lifted by the
Nikkei's fall and strength in the yen.
June 10-year JGB futures rose as high as 141.03, before
trimming gains to 140.77 <2JGBv1>, a rise of 0.33 of a point on
the day.
The 10-year JGB yield fell 0.5 basis points to 1.270
percent <JP10YTN=JBTC>, edging back towards a three-year low of
1.215 percent reached on Wednesday.
Surging oil and a weaker dollar sent investors to gold.
Spot prices <XAU=> rose to $952.30/953.10 an ounce.
(Editing by Lincoln Feast)
