RPT-GLOBAL MARKETS-Asia stocks slip on bank fears

                                
 * US dollar index at 3-yr high as global growth views
darken
                                
 * Australia GDP shrinks for first time in 8 years
                                
 * Hopes grow for more China stimulus to help region
 (Repeats to more subscribers)
                                
 By Kevin Plumberg
                                
 HONG KONG, March 4 (Reuters) - Asian stocks edged lower for
a fifth day while the U.S. dollar rose to a three-year high
against a basket of currencies on Wednesday, after Federal
Reserve Chairman Ben Bernanke gave a grim view on the financial
sector.
                                
 Australian shares dropped to the lowest since August 2003
after a report showed gross domestic product unexpectedly
shrank in the fourth quarter for the first time in eight years,
as the steep slowdown in global demand tore through Asian
economies.
                                
 Days after American International Group <AIG.N> posted the
largest U.S. corporate loss ever and received a $30 billion
government bailout -- its second rescue -- Bernanke left open
the possibility that even more money may be needed to stabilise
the banking system, 19 months after the financial crisis broke
out globally. [ID:nN03352803]
                                
 "There are concerns about revenue growth for banks due to
slowing global and domestic economies," said Savanth Sebastian,
equities economist at broker CommSec in Australia.
                                
 Japan's Nikkei share average <.N225> fell 0.8 percent, with
stocks of struggling automakers such as Honda Motor Co <7267.T>
and Toyota Motor Corp <7203.T> among the biggest drags on the
index. The Nikkei hit a 25-year low on Tuesday.
                                
 The country's mega banks were under pressure after
financials led the S&P 500 index <.SPX> to close below 700 for
the first time since October 1996. Mitsubishi UFJ Financial
Group <8306.T> was down 2.1 percent, while Sumitomo Mitsui
Financial Group <8316.T> fell 2.8 percent.
                                
 The MSCI index of Asia-Pacific shares outside Japan dipped
to a fresh three-month low <.MIAPJ0000PUS> and was 4.5 percent
away from a five-year low reached in November 2008.
                                
 The 1.4 percent fall in Australia's benchmark S&P/ASX 200
index <.AXJO> led the region.
                                
 Hong Kong's Hang Seng index <.HSI> was relatively
unchanged, as a 2.7 percent fall in HSBC stock <0005.HK> was
offset by strength in shares of Chinese banks.
                                
 Many policymakers have their eyes set squarely on China,
hoping the world's fourth-largest economy can tap its savings
to help global growth.
                                
 A senior Chinese economic planning official offered a spot
of hope on Wednesday, saying the government will increase
spending in areas such as infrastructure and manufacturing on
top of the 4 trillion yuan ($584.7 billion) stimulus package
unveiled in November. [ID:nBJC000263]
                                
 The IntercontinentalExchange's U.S. dollar index <.DXY>,
which measures its value against a basket of six major
currencies, was up 0.4 percent, having risen to the highest
since April 2006.
                                
 The index has gained 10 percent so far this year, as
investors cash out of foreign assets and seek the dollar's
liquidity as uncertainty about the global economy grows.
                                
 The Australian dollar fell 1 percent on the day to $0.6312
<AUD=>, after data showed the domestic economy shrank by 0.5
percent on a quarterly basis in the last three months of 2008,
putting the country on the brink of recession. [ID:nSYD282924]
                                
 Upward pressure on the U.S. dollar pushed down the euro to
a three-month low around $1.2455 <EUR=>.
                                
 Currency strategists at Standard Chartered Bank said
despite doubts about the U.S. dollar being able to sustain
strength in 2009 on the basis of valuation, the clearest trade
is still on dollar strength against Asia ex-Japan currencies.
                                
 "As long as global growth expectations are turning down
Asian export growth will deteriorate further and Asia ex-Japan
currencies will remain under pressure. We continue to focus on
that especially small open economy currencies should be hit
further," they said in a note.
                                
 U.S. Treasuries remained under pressure, pushing up the
yield on the benchmark 10-year note to 2.93 percent from around
2.90 percent overnight. Countless bank rescues and economic
stimulus measures by the U.S. government have increased
speculation that supply of Treasuries could expand by $2
trillion this year, making dealers wonder about the pittance
offered by the yields of their current holdings.
                                
 Oil slipped 0.7 percent to $41.36 a barrel after rising
nearly 4 percent overnight on expectations OPEC will cut output
again to place a floor under prices. [O/R]