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GLOBAL MARKETS-Asia stocks fall, euro dips on Greece woes

Published 04/22/2010, 03:02 AM
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* Asia stocks fall on worrisome U.S. outlooks, Greece fears

* Few catalysts for gains as solid earnings already priced in

* Euro weakens on scepticism Greece can dodge default

* Most earnings so far back view of slow but steady recovery

By Kevin Yao

SINGAPORE, April 22 (Reuters) - Asian stocks fell on Thursday as several major U.S. firms issued disappointing outlooks, casting doubts on the strength of a global recovery, and as investors grew impatient for action on Greece's debt crisis, weighing on the euro.

The euro fell broadly to $1.3380 from $1.3392 in New York on Wednesday. Despite paring some losses later, it appeared on track to soon test March's 10-month low of $1.3267.

Shares in Europe were expected to follow Asian markets lower as investors awaited a raft of quarterly earnings from bellwether companies including Nokia, Credit Suisse, Microsoft and American Express Co.

Investors are scouring earnings reports for signs that consumer demand is improving, which would boost sales and give a much-needed leg up to a flagging equities rally which began early last year.

However, many market watchers have already priced in strong growth expectations, leaving markets vulnerable to profit taking if earnings and forecasts do not surprise strongly on the upside.

"The market has risen quite steeply lately and it is taking a break. Investors have also turned a bit more cautious before earnings results of major firms," said Won Jong-hyuck, a market analyst at SK Securities in Seoul.

Disappointing outlooks from healthcare companies offset strong earnings from Morgan Stanley and Apple Inc, leaving Wall Street indexes little changed overnight.

After the closing bell, chipmaker Qualcomm Inc gave a weak forecast for the current quarter and full year, while Internet auctioneer and retailer EBay Inc also gave a forecast that fell short of Wall Street expectations, casting doubts over what has been an otherwise upbeat corporate reporting season so far.

The MSCI index of Asia-Pacific stocks outside Japan fell 0.6 percent, led by a decline in raw materials stocks, which were hit by weaker commodity prices.

Japan's Nikkei fell 1.3 percent with microchip-related stocks giving up gains made the previous day.

South Korea's shares fell 0.5 percent despite better-than-expected earnings reported by Hynix Semiconductor and Hyundai Motor Co

Shares in Hyundai gained 0.8 percent after it reported quarterly profits more than quadruple due to strong sales in China and India, while Hynix stocks recouped early losses to edge up 0.8 percent.

"Hynix's better-than-expected results give a good start to the technology sector earnings season, but the growing view is that all the good stuff is known and out already," Won said, adding that technology earnings will be solid through the third quarter, though growth momentum may get weaker.

Asian firms are just starting their quarterly earnings season with investors optimistic for strong performances across many sectors, driven by the region's brisk recovery from the global downturn, in contrast to still-tepid economic growth in the West.

GREEK CHORUS

Meanwhile, the euro extended overnight losses as mounting worries about whether Greece could finance its near-term debt obligations drove more investors to go short on the unit.

Against the pound, the euro fell to 86.78 pence its lowest in two months.

Greece started talks with European Union and International Monetary Fund officials on Wednesday on a potential aid deal that could offer Greece 40 billion to 45 billion euros in loans, but it would take several weeks before any plan could be finalised. For details, see

Greek Finance Minister George Papaconstantinou said a joint text will be agreed by May 15.

The delay means the EU/IMF package may not be in place in time to allow Greece to roll over debt which is maturing next month, heightening investor anxiety about sovereign defaults.

Gold held steady near $1,145 per ounce while U.S. crude futures eased to $83.60 a barrel, dropping for the second day in a row, as the stronger dollar raised costs for market players using other currencies to trade the dollar-denominated commodity. (Editing by Kim Coghill) (Additional reporting by Jungyoun Park in SEOUL)

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