RPT-GLOBAL MARKETS-Asian stocks, dollar sink on Bear, Fed

RPT-GLOBAL MARKETS-Asian stocks, dollar sink on Bear, Fed

Mon Mar 17, 2008 12:24am EDT, YAHOO

By Rafael Nam

HONG KONG, March 17 (Reuters) - Asian stocks sank on Monday to their lowest level since August 2007 and the dollar tumbled, as the fire sale of ailing U.S. bank Bear Stearns and the Federal Reserve's emergency cut in its discount rate intensified concerns that there could be more victims of the global credit crisis.

U.S. stock futures fell in Asian trade, pointing to a sharply lower Wall Street open later in the day, as global investors wonder if other financial institutions might need rescuing. S&P 500 futures SPc2 fell 30 points, while Dow Jones industrial average futures DJc2 dropped more than 200 points.

The fall in the dollar, which sank to a record low against the euro, sent spot gold and crude futures hurling towards record highs, deepening concerns of rising inflationary pressures throughout the region.

Other safe-haven assets also rose. Japanese government bond futures hit a three-year high and U.S. Treasury futures rose to a five-year high.

"Desperate times need desperate measures. The Federal Reserve is doing what it takes to restore stability and if it means cutting the discount rate on a Sunday night in the U.S., then so be it," said Craig James, chief equities economist at Commesec in Sydney.

The MSCI measure of Asian stocks outside Japan .MIAPJ0000PUS dropped 3.8 percent as of 0316 GMT, after earlier hitting its lowest since Aug. 20, 2007.

The index is now down about 20 percent for the year, marking a sharp reversal from five previous years of double-digit gains. Continued...