Asia stocks sag as U.S. auto woes stir caution

By Eric Burroughs

HONG KONG (Reuters) - Most Asian stocks edged down on Wednesday and regional currencies slid, as a plea from U.S. automakers for a bailout from Washington highlighted how the financial crisis is hurting broad swathes of the global economy.

Major European stock markets were expected to open slightly higher, according to financial bookmakers, after a late rally on Wall Street, but convictions were low and trading volumes slim.

Market players were spooked as executives at Detroit's Big Three gave a dire warning to Congress about their outlook while asking for $25 billion (17 billion pounds) of funds.

Oil was up a tad at $54.50 but still near a 22-month low on mounting worries about a deep global recession, highlighted by data showing confidence amongst U.S. home builders plunging to a record low.

Japan's Nikkei average slipped 0.7 percent, driven in part by falling bank shares after No. 1 Mitsubishi UFJ Financial Group suffered a 61 percent drop in quarterly profit and a report said Sumitomo Mitsui Financial Group aimed to raise $4.2 billion in capital.

The MSCI index of Asia-Pacific stocks outside of Japan fell 0.3 percent and was not far from a four-and-a-half-year low hit last month. The U.S. S&P 500 had gained 1 percent on Tuesday.

Australia's benchmark S&P/ASX 200 shed 0.7 percent on a drop in non-financial shares after authorities lifted a ban on short selling.

Troubles plaguing the banking system have yet to abate despite the efforts of central banks to get credit flowing again and problems have now spread to the broader global economy, leading to recessions in Japan, Europe and elsewhere.