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* Risk avoided at all costs; global recession seen deep
* Uncertainty over U.S. auto bailout, Citigroup fate
* MSCI world stock index down 12 pct this week
By Kevin Plumberg
HONG KONG, Nov 21 (Reuters) - Waves of selling in global
stock markets crashed into Asia on Friday, with gains from the
region's 5-year bull run now erased, and investors seen camping
out in government bonds and cash for the rest of the year.
U.S. stocks were at the lowest in a decade, and oil prices
fell to 3-1/2-year lows, trading below $50 a barrel, as
commodity prices slumped on expectations of reduced demand as a
result of a global recession.
The fate of U.S. corporate titans like General Motors
<GM.N>, Ford Motor Company <F.N> and Citigroup <C.N> was
uncertain, adding to a general mood of anxiety.
Democratic congressional leaders demanded executives at the
Big Three automakers come up with a detailed business survival
plan in exchange for their support of up to $25 billion in
loans. []
Citi, not long ago the world's most valuable financial
firm, was reportedly considering selling itself. []
"It's one car crash after another for the markets right now
and the risk of global economic recession is deepening by the
day," said Martin Slaney, head of derivatives at GFT in
Australia.
Investors priced in a 1-in-3 chance that the U.S. Federal
Reserve would cut its benchmark interest rate to 0.25 percent
from 1 percent on or before its next policy meeting in about
three weeks.
Growing ranks of economists say the U.S. central bank has
already embarked on unprecedented monetary expansion to head
off deflation, with its rate very likely heading to zero.
Japan's Nikkei share average <> dropped 2.7 percent,
extending its weekly decline to around 12 percent.
Stocks in the Asia-Pacific region excluding Japan were down
1.3 percent, according to an MSCI index <.MIAPJ0000PUS>, after
earlier slipping to their lowest since October 2003 when global
markets were just beginning to recover from the dot.com bubble.
The MSCI All-Country World Index <.MIWD00000PUS> was down
0.4 percent, plumbing the lowest levels since April 2003,
having now fallen 53 percent this year.
U.S. crude oil for January delivery <CLc1> was down more
than half a dollar at at $48.85 a barrel, after the December
contract settled down $4 at $49.62, the lowest settlement since
mid-May 2005. Oil has tumbled by nearly $100 from record highs
in July.
For global investors, the yen is a weather vane of risk
taking, with strength in the Japanese currency reflecting
distaste for anything resembling risk.
The yen slipped from 3-week highs against the dollar and
euro on Friday as short-term speculators booked profits, but it
retained its overall strength with fears of a deep global
recession rippling through markets.
The U.S. dollar recovered from a 3-week low of 93.55 yen
struck the previous day to 94.00 yen, up 0.4 percent on the
day. The euro edged up 0.3 percent to 117.05 yen <EURJPY=R>,
above a 3-week low of 116.45 yen hit on Thursday.
"The market needs positive news on the future of U.S.
automakers to make a decisive rebound, or there's little
prospect that the current support for the yen will abate soon,"
said Minoru Shioiri, chief manager of forex trading at
Mitsubishi UFJ Securities in Tokyo.
(Additional reporting by Satomi Noguchi in TOKYO and Mette
Fraende in SYDNEY)
(Editing by Ian Geoghegan)
