* Asian shares fall 2.9 pct, test 2009 low
* U.S. stock futures fall on Obama inauguration day
* Sterling hits record low against yen; dollar gains
* Some regional bonds gain on safe-haven bids (Adds
European outlook, updates prices)
By Rafael Nam
HONG KONG, Jan 20 (Reuters) - Asian shares slumped on
Tuesday on concerns that increasing woes in the global
financial sector will deepen the world's economic downturn,
highlighting the difficulties confronting incoming U.S.
President Barack Obama.
The tumble came after Royal Bank of Scotland <RBS.L> on
Monday unveiled the biggest loss in U.K. corporate history, and
after Britain launched a second bank rescue plan that failed to
restore confidence in the wobbly financial sector. []
Sterling dropped to a record low of 127.47 yen <GBPJPY=R>
against the Japanese currency, according to Reuters data, and
to its lowest against the U.S. dollar in almost seven years, as
investors switched to currencies seen as safer.
U.S. stock futures fell as Wall Street prepared to re-open
after the Martin Luther King Jr holiday on Monday. European
shares were set to fall for a second consecutive session. []
Regional bonds benefited from the uncertainty, while oil
<CLc1> steadied below $35 a barrel. Crude dropped on Monday
after Russia and Ukraine signed a gas deal that secures
supplies to Europe.
"The market is refocusing on the bigger global picture,"
said Justin Gallagher, head of Sydney sales trading at ABN
AMRO, pointing as well to expectations for weak corporate
earnings results in coming weeks.
"Clearly the market today continues to factor in more
disappointment and certainly, despite the inauguration of Obama
... the market is looking past that now and realising just how
big a mess the global economy is in," he said.
The MSCI index for Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> slid 2.9 percent as of 0315 GMT, after earlier
coming within 0.01 point of matching the 2009 low hit last
week.
The index is down more than 8 percent so far this year,
after it fell in 2008 by 53 percent -- its biggest decline on
record. Still, Asian shares are up about 16 percent since
hitting five-year lows in late November, having since
outperformed an MSCI index of global stocks and the S&P 500
index <.SPX>.
For chart double click on:
https://customers.reuters.com/d/graphics/GLBL_MKTS200109.gif
Asian banking shares from HSBC <HSBA.L> <0005.HK> to
Japanese lender Mizuho Financial Group <8411.T> were among the
leading decliners in the region as worries intensify about a
sector facing more credit and loan-related writedowns.
Japan's Nikkei <> fell 2.3 percent, while Australian
shares <> dropped 3.1 percent.
Other major Asian indexes, including in in Hong Kong
<>, South Korea <> and Taiwan <>, fell 1-2
percent each.
U.S. stock futures slid, with March S&P 500 futures <SPc1>
down 8.5 points, or 1 percent after earlier falling more than
1.5 percent. Dow Jones futures <DJc1> fell 0.8 percent.
Governments worldwide are grappling with how to get their
banks lending again to revive economies, despite already
injecting billions of dollars and implementing other measures
such as backing some of their debt.
Central banks have also cut interest rates sharply in a bid
to spark growth, but even that has failed to comfort investors.
RATING DOWNGRADES
Obama will be inaugurated as U.S. president later in the
day, and his administration is expected to quickly roll out a
hefty stimulus package and a revived plan to buy bad bank
assets.
European governments are passing spending measures of their
own, but the ensuing impact on their budget deficits are
leading some credit agencies to cut sovereign ratings.
Spain on Monday became the second euro zone country after
Greece to have its credit rating downgraded by Standard &
Poor's in less than a week. []
"People falsely were hoping these stimulus plan
announcements were going to fix everything," said Angus
Gluskie, a portfolio manager at White Funds Management in
Australia.
"But they've been faced squarely with an increasing number
of fundamental pieces of economic evidence over the last week
or so which has just proved to them that that's not the case."
Spain's downgrade, combined with worries about the
financial sector, sent the euro lower. The currency fell 0.4
percent from late trade on Monday to $1.3018 <EUR=> and earlier
hit a six-week low of $1.2988 on trading platform EBS.
The pound extended its losses on Tuesday to slide to as low
as $1.4132 against the dollar, its weakest since March 2002.
The flare up in risk aversion benefitted assets seen as
safer in volatile times. The dollar index <.DXY>, a gauge of
the greenback's performance against a basket of six major
currencies, gained 0.4 percent to 85.511.
Regional bonds also benefitted from investor caution. March
10-year Japanese government bond futures rose 0.29 point to
139.83 <2JGBv1>, near a four-month high of 140.19 hit last
week.
(Additional reporting by Mette Fraende in SYDNEY; Editing by
Lincoln Feast)
