RPT-GLOBAL MARKETS-Asia shares fall on credit, economy fears

(Repeats to additional subscribers with no change to text) (Updates with European outlook, latest Asian prices)
Wed Apr 9, 2008 2:12am EDT
By Rafael Nam

HONG KONG, April 9 (Reuters) - Asian stocks fell on Wednesday as financial shares were hit by reignited concerns about credit-related losses after U.S. savings and loans bank Washington Mutual said it expects a large quarterly loss.

The warning was seen by analysts as a reminder that the global financial crisis continues to take its toll, and could sour a recent rally in Asian shares by raising tensions ahead of results from Merrill Lynch (MER.N: Quote, Profile, Research) and Citigroup (C.N: Quote, Profile, Research) next week.

European shares were set to open lower, with financial bookmakers calling Britain's FTSE 100 index .FTSE, France's CAC 40 .FCHI and Germany's DAX .GDAXI all down about 0.2 percent.

A weakening U.S. economy is also looming large again, with the dollar remaining under pressure after minutes from the Federal Reserve's most recent meeting showed concerns about a slide in the U.S. economy at a time of rising inflation. [ID:nN08375266]

"Those that say that the all banks have bottomed already actually don't look at the bad debts cycle which runs for a long period of time," said Neale Goldston-Morris, head of equity strategy at Macquarie Equities in Sydney.

"The banks are going to run into continuous earnings downgrades for about another 12 months or so."

The MSCI measure of Asian stocks outside Japan .MIAPJ0000PUS fell 0.6 percent by 0550 GMT, erasing earlier modest gains to post losses for a second day in a row. Continued...