* Stocks fall on worries U.S. bank rescue plan won't work
* U.S. dollar, gold in demand as volatility rises
* Hong Kong stocks snap 5-day winning run
* Saudi Arabia's Naimi warns of spikes in oil market
By Kevin Plumberg
HONG KONG, Feb 11 (Reuters) - Asian stocks fell, led by
financials, and the U.S. dollar rose on Wednesday on scepticism
about a new plan from Washington to heal the banking industry
that could cost as much as $2 trillion.
Details were in short supply about the U.S. Treasury's
revamped rescue plan for financial institutions, sending
disappointed investors searching for safety in assets such as
gold after Wall Street dove 4 percent overnight. []
A $838 billion economic stimulus bill passed the U.S.
Senate but faced further congressional dealmaking that could
stretch into next week before it becomes a law.
With trade protectionism a creeping fear in Europe and
exports in Asia collapsing, malaise sank into markets and
weighed on commodity prices. [] []
"It's just a matter of trying to identify how deep an
impact the global situation is going to have domestically, and
unfortunately the picture going forward for all of us still
remains quite unclear," said Jamie Spiteri, manager of
institutional sales at Shaw Stockbroking in Australia.
The MSCI index of stocks in Asia Pacific outside Japan slid
2.4 percent <.MIAPJ0000PUS>, down for a second day. Japan's
markets were closed for a public holiday.
South Korea's KOSPI <> fell 1.7 percent, with shares
of Shinhan Bank <055550.KS> and Woori Bank <053000.KS> were
among the heaviest drags on the index.
Hong Kong's Hang Seng <> dropped 3.25 percent and was
the biggest decliner in the region after it snapped a five-day
winning streak. Shares of index heavyweight HSBC <0005.HK>,
Europe's biggest lender, were down 4.5 percent, one of the
largest percentage losers in the index.
Regional stocks had risen some 9 percent in the last two
weeks, largely ignoring a raft of negative news, on optimism
about the White House bank rescue and on hopes that falling
global industrial output may be close to bottoming out. But
those hopes were fizzling quickly.
"The economic shock is so strong that policy reactions can
only buffer its impact, but the outlook for the coming months
remains very challenging, and further correction of asset
prices/most Asian currencies is likely to happen in coming
months," said Sebastien Barbe, a currency strategist with
Calyon in Hong Kong.
"We still expect most currencies in Asia to correct by
about 10 percent versus the U.S. dollar in the coming three
months," he said in a note.
The U.S. dollar extended a broad rally from overnight. The
euro was down 0.3 percent to $1.2873 <EUR=> but rose 0.4
percent against the Swiss franc <CHF=>.
Gold <XAU> was steady at around $912.60 an ounce after
jumping more than 2 percent overnight as market volatility
increased, while copper traded in Shanghai <SCFc3> dropped 3
percent, ending six-day string of gains.
Oil prices ticked up 38 cents to $37.93 a barrel <CLc1>
after tumbling $2.01 overnight.
Ali al-Naimi, Saudi Arabia's oil minister, warned of
further erratic price action because prices were in his view
unjustifiably low.
"If today's low prices continue long enough, they will sow
the seeds for future price spikes and volatility," he said in a
keynote address to the CERAWeek conference in Houston.
[]
In the bond market, the benchmark 10-year U.S. Treasury
yield <US10YT=RR>, which moves in the opposite direction of the
price, ticked up to 2.82 percent from 2.81 percent overnight.
The yield tumbled 18 basis points overnight after the
unveiling of the bank rescue plan.
(Additional reporting by Simone Giuliani in MELBOURNE and
Chris Baltimore in HOUSTON)
(Editing by Kim Coghill)
