ASIA-Shares to struggle against tide of poor news

WELLINGTON: Asian stocks face a likely torrid session, as U.S. debt woes, poor earnings and weak data hammered markets across the world.

The main Wall Street indices fell by between 1.6 percent and 2.7 percent, the worst day in eight weeks.

The U.S. government debt ceiling stalemate moved closer to the Aug. 2 deadline with no sign of a resolution.

TECHNOLOGY [] stocks fell after a profit warning from Juniper Networks , while weak durable goods data also weighed.

The CBOE Volatility Index rose 13.6 percent, gaining for a third day, and analysts said the index is pricing in an increasing chance of a U.S. credit downgrade.

Asian stocks listed on Wall Street fell 1.72 percent while world stocks, as measured by the MSCI world equity index, sunk 1.7 percent.

British shares fell 1.2 percent while European shares fell 1.1 percent, as markets became increasingly fearful about the likelihood of a U.S. downgrade.

The U.S. dollar clawed back some of its recent losses against the euro although the rally is seen as likely to be short-lived, with the currency hitting a four-month low against the Japanese yen.

The yen's strength will weigh further on Japanese markets, which are seen opening lower, with Nikkei futures traded in Chicago 110 points below the last closing level in Osaka.

Australian stocks are also set for a sharp drop, with share price index futures down 1.4 percent to sit at a 89.4 point discount to the close of the underlying S&P/ASX 200 index. – Reuters