* Crude oil tops $116 on international tension with Russia
* Exporters under fire as global growth seen falling
* Scepticism trounces hopes for China fiscal stimulus plan
(Updates prices, adds European outlook)
By Kevin Plumberg
HONG KONG, Aug 21 (Reuters) - Asian stocks fell on Thursday
on investors worried about the ability of the region's
exporters to weather a widespread economic slowdown, while the
U.S. dollar slid as oil prices rose above $116, halting the
currency's rally.
European stocks were expected to open as much as 0.7
percent lower as higher oil prices rekindled worries about
inflation and consumer spending, according to financial
bookrunners, with the euro <EUR=> pushing up toward $1.48.
The U.S. housing market, the source of a financial crisis
that threatens to drag all Group of Seven rich nations into a
recession, remained a chief concern, as shares of top mortgage
finance companies Fannie Mae <FNM.N> and Freddie Mac <FRE.N>
tumbled overnight to their lowest in nearly 20 years.
Instability in the financial sector continued to ripple
through markets and breed nervousness. The Federal Reserve
acted on rumours last month and called Credit Suisse Group
<CSGN.VX> to see if it had pulled a credit line from U.S.
investment bank Lehman Brothers Holdings Inc <LEH.N>, the Wall
Street Journal said. []
Crude prices rose for a third day after an agreement on a
U.S.-Poland missile shield drew a cold response from Russia,
the world's second-largest oil producer.
U.S. crude futures <CLc1> jumped by more than $1 to $116.84
a barrel, adding to cost headaches and profit pressures for
corporate managers already frazzled by shrinking demand.
"Exporters don't have power to keep rising as the U.S. and
European economies are getting worse and the demand volume is
declining," said Takahiko Murai, general manager of equities at
Nozomi Securities in Tokyo.
Shares of high profile exporters such as Honda Motor Co
<7267.T>, Samsung Electronics Co Ltd <005930.KS> and Taiwan
Semiconductor <2330.TW> were among the top drags on their
respective indexes.
Japan's Nikkei share average <> finished down 0.8
percent, within striking distance of chart support around
12,670 points, below which would mark a 4-1/2-month low.
Outside Japan, Asia-Pacific shares fell 1.4 percent,
approaching a 17-month low touched on Tuesday, according to an
MSCI index <.MIAPJ00000PUS>.
Babcock & Brown Ltd stock <BNB.AX> plunged 35 percent after
the investment firm's chief executive and chairman stepped
down, leading the decliners on Australia's S&P/ASX 200 index
<>, which fell 1 percent.
Babcock's shares have lost nearly 90 percent in value this
year as worries grow about the viability of its debt-funded
investment model amid the global credit crunch.
Hong Kong's Hang Seng index <> dropped 1.8 percent
after dipping to a 1-year low on Wednesday, with a fall in
China Mobile <0941.HK> shares leading the way.
The Shanghai composite index declined 3.1 percent <>,
unable to sustain momentum after posting its biggest single-day
rise in four months on Wednesday.
NO WORD FROM BEIJING
Hopes for a near-term fiscal stimulus package from Beijing
faded amid doubts about the need for government support in what
is still the world's fastest growing major economy.
Louis Wong, research director with Phillip Securities in
Hong Kong, said markets were unlikely to get a helping hand
from China's government any time soon, especially since the
country's financial sector is in relatively good shape compared
with Europe and the United States.
"There have been no bank failures in China and mainland
banks are reporting high double digit earnings growth, so what
is the logic for a stimulus package?" he said.
Unidentified officials with China's National Development
and Reform Commission and the Ministry of Finance denied or
said they were unaware of market talk that China was
considering a 200-400 billion yuan stimulus plan, according to
the International Finance News.
There were also signs that slack demand from developed
economies for Asian exports is shifting the global trade
dynamic. July figures from Japan showed exports to China topped
exports to the United States for the first time since World War
II. []
Whether demand from China alone could support the entire
global economy is another issue altogether. Expectations for
the global economy have fallen to their lowest level in nearly
18 years, with the outlook in Western Europe and Asia
deteriorating, the Ifo economic research institute said on
Wednesday.
Oil price gains helped hold back the U.S. dollar, which has
rallied more than 8 percent in the last month against the euro
on increasing signs the European Central Bank will not raise
interest rates this year to fight inflation as the economy
shrinks.
The euro was up 0.35 percent at $1.4795 <EUR=>, well above
a six-month low of $1.4630 touched on Tuesday, but below a
record high of $1.6040 in mid-July.
Against the yen, the dollar dropped 0.8 percent to 108.92
yen <JPY=>, almost 2 yen below a seven-month high of 110.67 yen
hit last week.
Spot gold <XAU=> edged up 0.6 percent to around $817.40 an
ounce as firmer oil prices encouraged safe-haven asset buying.
