(Refiles to fix typo in first paragraph)
By Nina Mehra
HONG KONG, Jan 9 (Reuters) - Asian stocks sank to a
three-week low on Wednesday with Japan's Nikkei hitting an
18-month trough amid investor worries about the state of the
U.S. economy, while gold jumped to a record and bonds gained on
a flight to safety.
The sell-off was sparked by a statement from AT&T <T.N> on
Tuesday which said it saw softness in its consumer business in
the United States, highlighting the risk of recession in Asia's
top export market. []
Oil prices extended gains in Asia after surging overnight
on threats of violence in oil producer Nigeria and concern over
tight inventories in the United States heading into the coldest
part of winter, while the dollar steadied after falls in the
prior session.
"Gloom and doom is everywhere at the moment. U.S. consumer
spending being softer does not bode very well," said Macquarie
Equities division director Lucinda Chan.
MSCI's measure of Asia Pacific stock excluding Japan
<.MIAPJ0000PUS> fell 0.7 percent by 0330 GMT, after earlier
touching its lowest level since Dec. 21.
The index has dropped some 3 percent this year, as a series
of reports signalled the United States may be headed for a
sharper-than-expected slowdown at a time when investors are
already concerned about the condition of global credit markets.
Asia could face slowing economic growth this year after a
solid 2007 due to declining exports to the United States. Data
last week showed Singapore's export-driven economy unexpectedly
shrank for the first time since 2003 in the fourth quarter.
Tokyo shares <> fell 0.8 percent after earlier sinking
to a new 18-month low, led by exporters such as Canon <7751.T>
and Toyota Motor <7203.T>. The Nikkei share average has lost
more than 21 percent of its value over the past six months.
South Korea <> also sank 0.8 percent after earlier
hitting a six-week low, with shares in top auto maker Hyundai
Motor <005380.KS> especially hit.
Hong Kong <> fell 0.7 percent and Australia's
benchmark S&P/ASX 200 index <.AXJ0> dropped 1 percent.
Financials such as South Korea's Kookmin Bank <060000.KS>
also retreated, hit as well after bankruptcy rumours for
U.S.lender Countrywide Financial sparked fears of a wider
fallout from the subprime mortgage crisis.[]
GOLD SHINES
Spot gold prices <XAU=> sprinted to a fresh record
$885.90/886.70 an ounce in Asian trade, surpassing the historic
high hit just overnight.
"Gold is bullish. Funds are pouring into markets as they
are performing well when stocks are slumping," said Tatsuo
Kageyama, an analyst at Kanetsu Asset Management.
"The speed of gold's rise is very fast but the market is
focusing on taking gold towards $900 in the near term."
Investors also sought the safety of bonds, with Japanese
government bond futures hitting a one-month high and amid
rising expectations the Federal Reserve will cut U.S. interest
rates at its meeting in late January.
U.S. crude futures <CLc1> rose 34 cents to $96.67 in Asia,
after surging $1 overnight on news that armed groups in
Nigeria's oil producing south are building up arms and supplies
for a major attack on an oil facility [].
The dollar stood at 109.20 yen <JPY=> as of 0338 GMT,
little changed from late U.S. trading on Tuesday. The currency
had been hit overnight on concerns about the U.S economy.
(Editing by Jan Dahinten)
