(Corrects to make clear that Moody's downgrade of Societe Generale was not due to its exposure to Greece).
(Adds European futures, updates prices)
* Nikkei down 1.1 percent, MSCI AP ex-Japan off 2.8 percent
* Euro STOXX 50 futures down 1.1 percent, FTSE seen off 0.8 percent
* Euro eases to around $1.3635, dollar index up 0.5 percent
* Greek, French and German leaders to confer at 1600 GMT
* Oil, copper fall; U.S. crude below $89 a barrel
By Alex Richardson
SINGAPORE, Sept 14 (Reuters) - European stock index futures fell on Wednesday following an equity sell-off in Asia, where some regional indexes hit lows last plumbed in 2009, on persistent fears that Europe's sovereign debt problems are causing a banking crisis.
The euro zone's troubles -- underscored by a downgrade from Moody's for two big French banks -- knocked the single currency lower, while in Asia mutual funds slashed bets on regional currencies to shore up other parts of their portfolios.
Global markets have been roiled since the end of July by the twin fears of renewed recession in the United States and Europe's protracted debt woes, which have seen Greece, Ireland and Portugal forced to take bailouts and piled bond market pressure on Italy and Spain.
"Some of the European banks may have to recapitalise their balance sheets with government assistance. It's creating a lot of nervousness and uncertainty," said Simon Bonouvrie, portfolio manager at Platypus Asset Management in Sydney.
Euro STOXX 50 index futures
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ADB economic forecasts: http://link.reuters.com/kad73s
Asia corporate sentiment: http://link.reuters.com/qew63s
http://link.reuters.com/vew63s
Euro zone crisis in graphics: http://r.reuters.com/hyb65p
European banks in graphics: http://link.reuters.com/qux33s
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Oil eased after the International Energy Agency revised down its forecast for growth in consumption due to the struggling global economy.
Underlining the brittle state of confidence in global markets, the dollar and U.S. Treasuries rose and the yield on 10-year Japanese government bonds (JGBs) fell below 1 percent, as demand for assets perceived as safe havens remained high.
Japan's Nikkei share average <.N225> fell 1.1 percent to its lowest close two-and-a-half years, while MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> dropped 2.8 percent, after touching a 14-month low below levels hit during the most volatile part of August. [.T]
Hong Kong's Hang Seng index <.HSI> hit its lowest level since July 2009. [.HK]
The MSCI index is now more than 22 percent below its 2011 high reached in April. A decline of 20 percent or more is the rule-of-thumb definition of a bear market.
U.S. index futures traded in Asia
DEFAULT, DOWNGRADES
Markets had been spooked in recent days by renewed talk among euro zone policymakers of an imminent default by Greece, prompted by the country's failure to meet the fiscal goals set out in its European Union/IMF bailout.
Greek, German and French leaders were due to hold a conference call at 1600 GMT on Wednesday.
"The conference call will at least calm nerves ... and may provide 24 hours of reprieve. That's about it, though," said Sean Callow, a senior currency strategist at Westpac in Sydney.
The euro eased to around $1.3635
Moody's Investors Service downgraded credit ratings on
French banks Credit Agricole
Moody's said it downgraded the credit rating of Societe Generale by one notch because it no longer saw the bank getting additional "systemic support" over its peers, while Credit Agricole was downgraded due to continuing concerns about its Greek exposure. [ID:nL3E7KB0D9]
Confidence in the euro zone had been further dented on Tuesday when Italy, where lawmakers vote later on an austerity package at 1800 GMT, was forced to pay the highest interest rates since joining the euro in 1999 to sell 5-year bonds. [ID:nL5E7KD3C5]
Italy is a particular concern because, while Europe's bailout fund can cope with rescuing smaller, peripheral nations, it lacks the financial firepower to save the euro zone's third largest economy.
Europe's woes drove investors to seek shelter in the dollar, which rose 0.5 percent against a basket of major currencies <.DXY>, while the yield on 10-year Treasury notes fell to 1.965 percent
The Australian dollar
"People are taking profits from whatever assets they have profits to take on," a Japanese bank trader said.
CREDIT FREEZE
The exposure of European banks to sovereign debt has raised fears of a freezing of credit markets in a re-run of the panic that gripped the financial sector after the collapse of Lehman Brothers in late 2008.
Data from the Institute of International Finance this month showed European banks have 3 trillion euros invested in sovereign debt, or 8 percent of their total assets.
In a measure of the alarm in Washington, Treasury Secretary Timothy Geithner will take the unprecedented step of attending a meeting of EU finance ministers in Poland on Friday.
Benchmark 10-year JGB futures <2JGBv1> gained 0.16 point to 142.73, with the 10-year yield
"People are hesitant to sell bonds because they think it will be hard to solve the fundamental problems of the euro zone," said a trader at a Japanese bank.
Reflecting the gloomy outlook for the developed world, the Asian Development Bank on Wednesday trimmed its 2011 and 2012 growth forecasts, while noting the region's emerging economies were showing resilience. [ID:nL3E7KC20L]
Expectations of sagging growth hurt commodities that are dependent on industrial demand, as did the stronger dollar, which makes assets priced in the U.S. currency more expensive for holders of other currencies.
U.S. crude oil