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* IMF cuts 2008, 2009 global growth outlook
* Regulator warns Korea state bank against Lehman buy
* Ninth U.S. bank fails amid insolvency crisis
By Kevin Plumberg
HONG KONG, Aug 26 (Reuters) - Asian stocks fell more than 1
percent on Tuesday, after more trouble in the U.S. financial
sector, including a ninth bank failure, reminded investors of
the frail state of the global economy.
Worries about world growth were fuelled after the
International Monetary Fund trimmed global growth forecasts,
bolstering the dollar and underpinning safe-haven government
bond prices.
Equity markets were pressured after Columbian Bank and
Trust turned insolvent late last week. Even Denmark's central
bank had to take over one of the country's financial
institutions, increasing unease in Asia about the potential
ripple effects.
South Korea's top regulator meanwhile warned state-run
Korea Development Bank against taking the lead in buying a
foreign company. The bank on Friday had said it was open to
purchasing an overseas financial institution, naming embattled
Lehman Brothers Holdings Inc <LEH.N> as one option.
"Concerns about credit risks both in the United States and
Japan are still strong. There are also worries about the global
economic outlook," said Yukio Takahashi, a market analyst at
Shinko Securities in Tokyo.
Japan's Nikkei stock index <> slid 1.3 percent,
approaching a near five-month low touched on Friday. Shares of
the country's biggest lender Mitsubishi UFJ Financial Group
<8306.T> were down 3 percent.
Outside Japan, stocks in the Asia-Pacific region
<.MIAPJ0000PUS> were off 1.2 percent, within sight of a
17-month low hit on Thursday. Singapore's benchmark Straits
Times index <.FTSTI> sank to a two-year low, down 1.4 percent.
The saga with top U.S. mortgage finance companies Fannie
Mae <FNM.N> and Freddie Mac <FRE.N> turned bittersweet. On the
one hand, Freddie Mac easily sold $2 billion in debt on Monday,
reassuring the market that the companies can fund their
operations without a government bailout.
However, Fannie and Freddie preferred shares have become
radioactive. JPMorgan Chase & Co <JPM.N> said the market value
of its investments in the companies' preferred stock has been
halved this quarter to $600 million, showing how the financial
crisis is difficult to escape for even one of the least scathed
investment banks.
IMF CUTS GROWTH FORECASTS
Japanese government bond futures climbed towards a
four-month high on renewed worries about the health of the U.S.
financial sector.
September 10-year futures <2JGBv1> edged up 0.12 point to
138.22, holding near Monday's four-month peak of 138.39. The
benchmark 10-year yield <JP10YTN=JBTC> was flat at 1.425
percent, just above a four-month low of 1.405 percent touched
on Monday.
The U.S. dollar continued to benefit from investors seeing
a greater chance of lower interest rates outside the United
States, as the threat of recession haunts Britain and the euro
zone.
The International Monetary Fund has trimmed its forecasts
for 2008 and 2009 world economic growth, largely due to a
marked worsening in the outlook for the euro zone, a G20
finance official told Reuters on Monday. []
The IMF downgraded its global annual GDP growth forecast
for this year to 3.9 percent, down from 4.1 percent in its
World Economic Outlook last month. It projects 2009 growth of
3.7 percent, down from 3.9 percent.
The downward revisions are significant because they not
only bring the global economy closer to the IMF's definition of
a world recession -- growth of 3 percent or lower -- but also
suggest next year could be worse than this year.
The euro <EUR=> slipped 0.2 percent to $1.4717, about a
cent above last week's six-month low. The dollar was relatively
unchanged against the yen, at 109.44 yen <JPY=>.
The British pound fell 0.3 percent to $1.8475 <GBP=>, after
hitting its lowest since July 2006 on Monday.
Overnight developments in the financial sector hurt a
willingness to take risks among investors, knocking the
Australian dollar to a 7-month low and supporting the yen.
Oil rose moderately as Tropical Storm Gustav formed in the
Caribbean, the seventh storm of the Atlantic hurricane season,
stirring fears it could disrupt oil and natural gas output in
the Gulf of Mexico as it moves northwest.
U.S. light crude edged up 29 cents to $115.40 a barrel
<CLc1>, though it remains more than $30 below an all-time high
reached a month ago.
Gold was flat in the spot market <XAU=>, trading at $821.40
an ounce, but has shed more than $150 in the last month as oil
prices fell and the dollar strengthened.
