Reply #7: GLOBAL MARKETZ-Asia stocks fall on deepening growth fears [View All]

[Ghost Dog]

* AIG results weigh on financial sector

* Oil below $119, down around $30 from record high

* G7 recession becomes real possibility (Repeats to more subscribers with no change to text)

By Kevin Plumberg

HONG KONG, Aug 7 (Reuters) - Asian stocks fell on Thursday, as a sustained decline in oil prices could not shake a sense of gloom among investors about financial sector instability and the worsening global growth outlook.

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Concerns about wavering demand in China, whose economy has devoured natural resources for the last decade and pushed up commodity prices, also weighed on copper prices.

Lower oil prices could be interpreted as relief for U.S. consumers, on whom Asia depends for export demand. But inflation was still a global threat, bad loans continued to dog banks and insurers, and investors faced the prospect that all of the Group of Seven rich nations could slip into recession.

As a result, optimism was in short supply.

"Certainly the environment is one that should be positive, with the weaker yen and lower oil prices," said Hideyuki Ishiguro, supervisor at the investment strategy department at Okasan Securities in Tokyo. "But the idea that Japan's economy isn't good is spreading."

Japan's Nikkei share average .N225 fell about 1 percent, led by an 11 percent drop in shares of air-conditioner maker Daikin Industries Ltd (6367.T: Quote, Profile, Research, Stock Buzz) after the company cut its earnings outlook because of sluggish sales in Europe.

/... http://www.reuters.com/article/marketsNews/idINL766756220080807?rpc=44&sp=true