ASIA-Shares face weak start as pessimism rules

WELLINGTON: Asian stocks are set for a soft open on Monday, as a resurgence of fears of the U.S. falling back into recession and Europe's continuing debt problems weighed on investors and sent stocks falling.

Wall Street ended a fourth week of losses with no let-up in the negative sentiment. The main indices fell around 1.6 percent, with a dismal outlook for Hewlett-Packard the latest blow.

Investors still favoured the safety of gold, which hit a record high on Friday, but halted their rush to bonds, with the benchmark 10-year U.S. Treasury note up 1/32 of a point in price to yield 2.06 percent, after it had fallen below 2 percent on Thursday.

Attention is now on Federal Reserve Chairman Ben Bernanke's speech on Aug. 26 in Jackson Hole, Wyoming, for hints on how policymakers plan to address the weakness in the economy.

Asian stocks listed on Wall Street fell 0.89 percent, while world stocks, as measured by the MSCI world equity index, shed 1.6 percent, and while emerging markets stocks fell 2.5 percent.

British shares fell 1 percent while European shares shed 1.7 percent.

The U.S. dollar touched a record low against the Japanese yen , before paring its losses with the Wall St Journal reporting Japan's top currency official as saying Japanese authorities do not plan to intervene in the market often.

Japanese markets, which slipped 2.5 percent on Friday, face a fourth straight weaker session with Nikkei futures traded in Chicago 75 points below the last closing level in Osaka.

A key support level is seen at the March 15 closing low of 8,605.15, which if breached opens the way for a test of 8,500.

Australian stocks are also set to fall, with share price index futures at a 29.9 point discount to the close of the underlying S&P/ASX 200 index. – Reuters