RPT-GLOBAL MARKETS-Stocks slip, gold up as US bailout questioned

                                
 * Gold hits 7-week high as safety still desired
                                
 * Fears about crisis plan costs pressure U.S. dollar
                                
 * Money markets show signs of keeping stable
 (Repeats to additional subscribers with no change to text)
                                
 By Kevin Plumberg
                                
 HONG KONG, Sept 23 (Reuters) - Asian stocks slid on Tuesday
on skepticism about how Washington's $700 billion bailout plan
can restore confidence in the U.S. financial system when the
economy may be in a recession, boosting gold and government
debt.
                                
 The U.S. dollar stabilised after tumbling to a six-week low
against the euro overnight as oil prices soared. Initial
exuberance about Washington's answer to the financial crisis,
which is being fought over in Congress, faded and fears arose
about rising costs exploding the U.S. budget deficit.
                                
 Crude oil futures <CLc1> were down slightly below $109 a
barrel, after rising nearly $5 overnight on the weaker dollar.
Higher energy prices lent support to the skeptics about the
cost of what will likely be the biggest U.S. bailout ever.
                                
 "The combination of a weaker dollar and higher risk
aversion and lower Treasury yields suggests very strongly that
the market is questioning whether the Treasury plan will be
implemented in its current form," said Ashley Davies, currency
strategist with UBS in Singapore, in a note.
                                
 The MSCI index of Asia-Pacific stocks outside of Japan
<.MIAPJ0000PUS> slipped 1.5 percent, though it remained well
above a two-year low hit on Thursday.
                                
 Australia's benchmark S&P/ASX 200 index <.AXJO> was down
1.9 percent, with bank stocks and shares of mining firm BHP
Billiton <BHP.AX> the biggest drag.
                                
 The country's regulator eased a total ban on short selling,
allowing selected use of the strategy. However, investors
wondered if such restrictions put into effect around the world
would have much of a chance in stopping heavy selloffs.
                                
 "I don't think stopping short selling has stopped our
market from falling," said Tom Elliott, managing director of
hedge fund MM&E Capital in Melbourne. "If the U.S. bailout plan
falls apart, which it's showing signs of doing, then the
markets will go down again," Elliott said.
                                
 Hong Kong's Hang Seng index <.HSI> dropped 2 percent but it
traded well above the two-year low hit on Thursday. Shares of
China Mobile <0941.HK> and HSBC <0005.HK> were the heaviest
weights on the index.
                                
 Japan's market was closed on Tuesday because of a holiday.
                                
 Investors have sought refuge from soaring financial market
volatility in gold. After jumping more than 3 percent on
Monday, the precious metal was up 0.2 percent to $901.85 an
ounce <XAU=> after earlier touching a seven-week high of
$908.80.
                                
 Risk taking among investors, which usually benefits
emerging market assets, non-investment grade debt and
higher-yielding currencies, has been recovering only in patches
since the U.S. government began an all-out assault on stemming
the financial crisis late last week. Washington has opened up
its own balance sheet to illiquid assets, banned some
short-selling and rescued companies and money market funds.
                                
 Some signs show improved liquidity conditions in money
markets, with the overnight U.S. dollar borrowing rate stable
around 2.25 percent <USDOND=> and 3-month and 6-month U.S.
Treasury bill yields climbing above 1 percent.
                                
 However, many market participants remain shellshocked after
the last two extraordinary weeks in which Fannie Mae <FNM.N>
and Freddie Mac <FRE.N> were effectively nationalised, Lehman
Brothers <LEHMQ.PK> filed for bankruptcy, Washington bailed out
insurer American International Group <AIG.N> and Bank of
America <BAC.N> bought Merrill Lynch <MER.N>.
                                
 The euro was down 0.2 percent at $1.4770 <EUR=> after
having hit a six-week high around $1.4865 overnight and staged
its biggest one-day gain since its inception in January 1999.
                                
 The dollar slipped 0.1 percent to 105.33 yen <JPY=>, but
remained down 5.4 percent on the year.
                                
 The 10-year U.S. Treasury note yield <US10YT=RR>, which
moves in the opposite direction of the price, slipped to 3.835
percent after rising to 3.85 percent late on Monday in New
York.
                                
 The 2-year yield <US2YT=RR> fell to 2.13 percent from 2.19
percent.
                                
 The November U.S. light crude contract <CLc1> was down 52
cents to $108.85 a barrel though has risen for the last four
days. In its last day before expiry, the previous October
contract jumped almost 16 percent to over $120 a barrel on
Monday, its biggest one-day gain on record, as the dollar
weakened.
 (Additional reporting by Sonali Paul in MELBOURNE; Editing by
Lincoln Feast)