By Nina Mehra
HONG KONG, Jan 10 (Reuters) - Asian shares fell on Thursday
on worries about global growth after Goldman Sachs forecast a
U.S. recession this year, while bond prices hit a two-year high
and the dollar gained against sterling.
But financial bookmakers forecast a strong start for
European stocks, with Paris' blue-chip CAC-40 <> seen up
between 46 to 54 points and Britain's FTSE 100 <> expected
to add 37 to 41 points after late gains on Wall Street on
Wednesday.
Oil prices edged up in Asia after falling during the U.S.
day on the Goldman Sachs report of a looming U.S. recession
that could crimp demand in the world's largest energy consumer.
The dollar held near a nine-month high against sterling on
expectations of a rate cut by the Bank of England later in the
day amid growing concerns about the global economic outlook.
"Morgan Stanley is forecasting a mild U.S. recession and
some see earnings risks in the U.S. From an Asian perspective
we also see earnings risks in globally focused sectors such as
technology," said regional strategist at Morgan Stanley Malcolm
Wood.
"Conversely, the Federal Reserve and central banks are
cutting rates and adding liquidity," in an attempt to stave off
a sharp economic slowdown.
Fed Chairman Ben Bernanke was due to give a speech on the
U.S. economy later on Thursday. This and policy meetings at the
European Central Bank and Bank of England later in the day were
keeping a lid on market movements as investors waited for more
clues on the economic outlook from central bankers.
MSCI's measure of Asia Pacific stock excluding Japan
<.MIAPJ0000PUS> was down 0.3 percent as of 0600 GMT, after
touching a three-week low in the previous session.
The index has dropped some 2 percent this year, as a series
of reports are signalling the U.S. economy may be headed for a
sharper-than-expected slowdown. The United States is Asia's
biggest export market.
Tokyo shares <> ended down 1.5 percent, while South
Korea <> fell 1.1 percent. Australia's S&P/ASX 200 index
<> dipped 0.2 percent, as big miners such as BHP Billiton
<BHP.AX> turned negative.
Hong Kong <> dropped 1 percent with top Asian oil
refiner Sinopec <0386.HK> among the biggest decliners after
China said it would intervene to slow rising prices in energy,
food and other sectors, underlying its concern over mounting
inflationary pressures. Sinopec slumped more than 6 percent.
Shares in South Korean steelmaker POSCO Co Ltd <005490.KS>,
ended flat. The world's fourth-largest steel maker is expected
to report an 11 percent drop in fourth-quarter earnings, but
investors hope to hear that earnings momentum will be regained
in the current quarter. []
GOLD NEAR RECORD
Spot gold <XAU=> was steady at $877.90/888.70 an ounce,
after hitting a record above $891 on Wednesday, with strong
investor demand underpinning sentiment.
Gold and other commodities have started the year around
record levels, with investment funds diversifying their
portfolios to hedge against declining equity markets.
Japanese government bond futures hit a two-year high as
risk averse investors flocked to safe haven assets and after
earlier comments by BOJ Governor Toshiro Muto who warned of an
accelerating U.S. economic slowdown.
U.S. crude prices <CLc1> steadied near $95.67 a barrel,
while London Brent crude was up at $94.42 a barrel, after
prices dipped overnight on supply worries.
The dollar bought 109.60 yen, off Wednesday's high of
110.13 yen.
(Editing by Kim Coghill)
