ASIA-Shares to slump on euro zone debt fears

MELBOURNE: Asian stocks are set to tumble on Thursday, giving up Wednesday's gains after Wall Street and European markets sank on fears France may be next in line to lose its top credit rating and rumours about the health of French banks.

The main Wall Street indices all fell more than 4 percent, as investors dumped banks, concerned that Europe's debt crisis could engulf French banks and spill onto the U.S. financial sector.

Asian stocks listed on Wall Street dropped 4.1 percent while world stocks, as measured by the MSCI world equity index , fell 2.4 percent, and the Thomson Reuters global stock index slid 2.6 percent.

British shares sank 3.1 percent to a 13-month low close, while European shares dropped 4 percent.

French bank woes weighed on the euro, pushing it down to $1.4142.

Japanese markets are poised to slide, with Nikkei futures traded in Chicago sliding to 8,815 points, 2.3 percent below the close in Osaka.

Australian shares are set to erase most of their recently recovered gains and head back into bearish ground on Thursday after U.S. stocks plunged and copper prices hit an 8-month low.

Share index futures dropped 99 points to 3,995.0, a 146.3 point discount to the close of the underlying S&P/ASX 200 index.

"Tuesday's dramatic turn around on the ASX will be remembered by traders for decades to come. But even the most optimistic of bulls could not be thinking that lightning will strike in the same place in the space of a few days," said Ben Le Brun, market analyst at CMC Markets. – Reuters