GLOBAL MARKETS-Asia stocks at 7-week low; global fears build

                                
 By Rafael Nam
                                
 HONG KONG, March 10 (Reuters) - Asian stocks hit their
lowest in almost seven weeks on Monday, while the dollar was
near a record low against the euro and an eight-year low
against the yen after weak U.S. employment data fuelled
recession fears.
                                
 European shares were also expected to open lower, with
Britain's FTSE 100 <.FTSE> seen down as much as 0.9 percent,
and Germany's DAX <.GDAXI> and France's CAC 40 <.FCHI> tipped
to open down as much as 1 percent, according to financial
bookmakers.
                                
 Inflationary pressures remain a concern around Asia.
                                
 Data on Monday showed South Korean producer prices rose 6.8
percent in February from a year before, the biggest gain in
over three years, while Chinese producer prices were up 6.6
percent. [ID:nSEU000008] and [ID:nPEK229240]
                                
 Oil prices kept near a record high despite the worsening
global economic outlook, held up by cold weather in parts of
the United States, while gold moved back above $975 an ounce.
                                
 "We're at a pretty terrible place where the economic news
continues to be bad," said Adnan Kucukalic, equity strategist
at Credit Suisse. "Our belief is that this slowdown is going to
be across the globe. If the U.S. slows, of course the entire
world slows. Things look pretty grim in the next three months
or so."
                                
 The MSCI measure of Asian stocks outside Japan
<.MIAPJ0000PUS> fell 2.8 percent by 0650 GMT after hitting its
lowest since Jan. 23.
                                
 The prospects of a U.S. recession and worsening global
credit conditions have hit Asian stocks hard this year, with
the MSCI index down 14 percent as of last week, worse than the
12 percent fall in the Standard & Poor's S&P 500 <.SPX> or the
10 percent drop in the Dow Jones industrial average <.DJI>.
                                
 As stocks lurched lower, Asian bonds extended their gains,
with Japanese government bond futures climbing to a 2-1/2-year
high. March futures <2JGBv1> rose 0.45 point to 139.50.
                                
 Shares in exporters such as Sony Corp <6758.T>, which
depend on U.S. consumers, dropped after data published on
Friday showed employers unexpectedly cut jobs last month at the
steepest rate in nearly five years. [ID:nN07310787]
                                
 Financial firms fell on concerns about more writedowns
worldwide after U.S. housing loan provider Thornburg Mortgage
Inc <TMA.N> said on Friday it could not meet its own lenders'
demands for $610 million of cash or collateral. [ID:nN07344671]
                                
 "The subprime problem is a creeping disease. It initially
infected relatively few people, but the contagion has spread to
a much greater portion of the credit market," MF Global analyst
Edward Meir said.
                                
 Japan's Nikkei average <.N225> ended down 2 percent at its
lowest close since September 2005.
                                
 Shares in China <.SSEC> and India <.BSESN> fell more than 3
percent, while markets in South Korea <.KS11>, Taiwan <.TWII>
and Singapore <.FTSTI> lost more than 2 percent.
                                
 MALAYSIA MAULED
                                
 Malaysian stocks <.KLSE> were among Asia's biggest
decliners, falling more than 8 percent to a seven-month low
after the ruling coalition suffered its worst election result
in decades. [ID:nSP84655]
                                
 "The political stability of the country becomes a question
mark," said Pankaj Kumar, chief investment officer at Kurnia
Insurance.
                                
 Shares in China Railway Construction <601186.SS> rose 28
percent on their Shanghai debut after the company raised $5.4
billion in a dual listing with Hong Kong in the world's largest
initial public offering this year, [ID:nSHA204900] but the gain
was some way below market expectations.
                                
 Despite a surprisingly big jump in Japanese machinery
orders [ID:nT17328], an often volatile series, and the South
Korean finance ministry's confidence in its 2008 economic
growth target of around 6 percent [ID:nSEO214128], the weakness
of the U.S. economy remained the dominant theme for investors.
                                
 China's trade surplus fell in February to $8.56 billion,
well below the $21.9 billion forecast by economists, as export
growth slowed more than expected, while imports grew.
[ID:nBJB000044]
                                
 The dollar continued this year's slump, falling around 0.6
percent from Friday to 102.16 yen <JPY=>, near an eight-year
low of 101.40. The euro rose 0.2 percent to $1.5380 <EUR=>,
near a record high of $1.5465 hit in electronic trade on
Friday.
                                
 The falling value of the world's dominant currency has been
a major factor behind this year's surge in commodity prices.
                                
 Oil prices were range-bound on Monday, with U.S. light
crude for April delivery <CLc1> up 10 cents to $105.25 a
barrel, within sight of the record $106.54 hit on Friday.
                                
 Gold <XAU=> moved back up about $975 an ounce from around
$972 in late Friday trade in New York, while platinum <XPT=>
firmed to around $2,082 an ounce from $2,020/$2,030.