(Update with European shares, latest Asian prices)
By Rafael Nam
HONG KONG, April 10 (Reuters) - Major Asian stock indexes
dropped and the dollar remained weak on Thursday on concerns
about the impact of a credit crisis on the global economy and
as record oil prices fuel inflation worries.
But pockets of better earnings potential, including in
Chinese banks and South Korean chip makers, boosted the appeal
of some Asian stocks, offsetting gloomy broader economy
signals.
The International Monetary Fund cut its 2008 world growth
forecast on Wednesday, its second such move in four months,
predicting a recession for the U.S. economy and slower global
expansion on the back of the financial crisis. []
U.S. firms such as United Parcel Service Inc <UPS.N>,
considered a bellwether of U.S. economic activity, have also
cut their earnings forecasts this week, highlighting the threat
to company earnings from a slowing U.S. economy.
European markets, including Britain's FTSE 100 <>,
Germany's DAX <> and France's CAC-40 <> were
expected to post modest declines ahead of rate decisions from
both the European Central Bank and the Bank of England.
"UPS slashing its forecast has really sparked fears about
the U.S. economy, and this is carrying over to Japan as our
earnings season moves into higher gear," said Kazuki Miyazawa,
an analyst at Daiwa Securities SMBC.
Asian stocks are down over 11 percent for the year amid
concerns a global credit crunch and a U.S. recession will
adversely impact growth in the region at a time when sky high
commodity prices are sparking inflation.
South Korea's central bank left interest rates unchanged
for its export-reliant economy on Thursday, with traders
betting monetary policy will soon be eased. []
But some optimism remains. Singapore said its economy,
whose performance is seen by economists as a barometer of
demand for Asian goods, expanded at a stronger-than-expected
seasonally adjusted rate of 16.9 percent. []
MAJOR INDEXES HIT
Japan's Nikkei average <> fell 1.3 percent. Stocks in
Australia <> dropped 1.2 percent, while Singapore <.FTSTI>
eased 0.6 percent.
But semiconductor firms across the region, such as Hynix
Semiconductor Inc <000660.KS>, gained after Japan's Elpida
Memory Inc <6665.T> said on Wednesday it would charge more for
memory chips, boosting hopes that a slump in the sector may
soon end. []
Taiwan's main stock index <TWII> rose 1.9 percent and South
Korea <> gained 0.6 percent, as both indexes are heavily
weighted by memory chip makers.
Share markets in Shanghai <> and Hong Kong <>
showed small gains. Industrial and Commercial Bank of China
<1398.HK> estimated on Wednesday that net profit in the first
quarter this year rose at least 50 percent. []
Overall, the MSCI's broad measure of Asian stocks outside
Japan <.MIAPJ0000PUS> edged up 0.3 percent, but is still down
by more than 11 percent so far this year.
WEAK DOLLAR
The dollar remained weak, with investors focused on
interest rate differences given expectations the Federal
Reserve will continue to cut U.S. rates this month, while the
European Central Bank is seen holding rates later on Thursday.
[]
The dollar fell 0.8 percent to 100.99 yen <JPY=>, after
earlier falling to as low as 100.85.
Strengthening local currencies are a worrying trend for
Asian exporters as this cuts into returns from overseas profits
while making their products less competitive.
The euro rose 0.1 percent to $1.5840 <EUR=>, with some
traders saying the currency could take a shot in the near term
at topping last month's record $1.5905.
Oil prices <Clc1> held firm around $111 a barrel, within
sight of the previous day's record $112.21 after a sharp fall
in U.S. crude and fuel stocks rekindled concerns about
summertime supplies.
Gold <XAU=> eased slightly to $930.50 an ounce after
jumping more than 2 percent on Wednesday when it tracked higher
oil prices.
