GLOBAL MARKETS-Asia stocks at 4-yr low as global economy slows

Yen pushed a 6-year higher than the euro as Asian stocks fell on fears emerging market weakness will continue a global recession and depress corporate earnings. European stock futures STXEc1 were only down slightly, helped by a rise in U.S. stock futures SPc1.

After a stabilization of credit market that unearthed a new focus on the impact of the financial crisis on real economies, investors mostly sought refuge in government debt of the euro zone, United States and Japan.

Insurance cost against sovereign debt in countries such as South Korea, Indonesia and Philippines soared, with a sense of anxiousness after Argentina moved to nationalize its pension system. The step was interpreted by investors as plea to stave off default.

Markets in developing countries were abandoned overnight with almost no one spared from a sharp slowdown in the global economy that has pushed down oil prices and copper prices to a three-year low.

Export-dependent Asian economies have darkened and hit shares of many famous companies who depend on overseas sales such as Samsung Electronics and Canon Inc

"Even after a series of concerted efforts by governments to stabilize the financial markets, it seems that the global economy is still under pressure and will likely slip into a recession," said Daniel Chan, senior investment strategist at DBS Bank in Hong Kong.

Stocks falling down

The MSCI index of Asia-Pacific stocks outside Japan fell 5.5 percent to its lowest since October 2004.

The global emerging markets index was down 3.7 percent to a near 4-year low, and its 35 percent drop so far in October has outpaced the 25 percent decline on the all-country world index.

Japan's Nikkei share average fell 2.5 percent, though it was down as much as 7 percent earlier in the day. The index cut losses as U.S. stock futures extended gains following a story in the Wall Street Journal saying the U.S. government will consider a $40 billion plan to slow home foreclosures.

Some property stocks managed to gain after the Chinese government late on Wednesday announced policies to increase homeownership. China Overseas Land's stock rose 2.1 percent, despite a 6.8 percent drop in mainland Chinese stocks listed in Hong Kong