GLOBAL MARKETS-Asian shares resume slide on fears overChinese economy

* MSCI's broadest index suffers biggest loss in 4 years

Dollar at 7-month low vs euro, yen

* Oil, copper prices at lowest level since 2009

By Hideyuki Sano

TOKYO, Aug 25 (Reuters) - Asian stocks looked vulnerable to another sell-off on Tuesday, withinvestors gripped by fears of a hard landing for the Chinese economy, the world's most importantgrowth engine.

Japan's Nikkei index fell 3.8 percent to six-month lows while the MSCI's broadest index of Asia-Pacific shares outside Japan hit fresh three-year lows.

Underlining concerns about China, Japanese Finance Minister Taro Aso said on Tuesday he hopedChina would take action to stabilise its economy and that Tokyo had no plan for now to unveil itsown new economic stimulus package.

MSCI's all country world index fell 3.8 percent on Monday to a 10 1/2-month low, its biggest fall inalmost four years. It has lost 9.2 percent over five days.

Leading the losses were Chinese shares, which plunged more than 8 percent to post their biggestlosses since 2007 on heightened worries that the Chinese economy was growing at a much slowerpace than Beijing's 7 percent target for 2015.

Investors are also unnerved by uncertainty over U.S. monetary policy. The Federal Reserve has saidit plans to raise interest rates this year for the first time in almost a decade.

The heavy fall in share prices worldwide over the past week has sharply reduced expectations of aU.S. rate hike in September, but the outlook is far from clear.

"There seems to be no consensus with the Fed on whether they are worried about acting tooprematurely or too late," Toru Yamamoto, chief bond strategist at Daiwa Securities, said in report.

The S&P 500 Index fell 3.9 percent to a 10-month low on Monday. The CBOE volatility index, a keymeasure of U.S. equity volatility, shot up to more than 50 percent at one point for the first time sincethe 2008 global financial crisis.

Because some investors often fund their investment in risk assets by borrowing low-yielding euroand yen, the sell-off in shares helped send both currencies to seven-month highs.

The euro rose as high as $1.1715 and last stood at $1.1571 while the yen strengthened to 116.15 tothe dollar before stepping back to 118.80.

The dollar was not helped by falls in U.S. bond yields either, which diminishes the currency's yield

attraction.

The 10-year U.S. Treasuries yield fell to a four-month low of 1.905 percent in choppy trade onMonday and last stood at 2.012 percent.

Oil prices plunged more than 6 percent on Monday to 6 1/2-year lows after the dive in Chineseequities market.

U.S. crude futures traded at $38.38 per barrel, near Monday's low of $37.75.

Brent crude futures fell to $42.23 on Monday and last stood at $42.69.

Brent stood not far from $36.20, its low hit in the aftermath of the global financial crisis, havingfallen more than 66 percent from last year's peak.

Copper, a good indicator of global economic activity because of its wide use, declined to a six-yearlow of $4,855 a tonne, falling more than 52 percent from its 2011.

The fall in commodity prices have hurt many commodity exporting countries' currencies.

The Australian dollar traded at $0.7177, havingfallen to a 6-1/2-year low of $0.7044 on Monday.

(Editing by Mark Bendeich)

http://www.cnbc.com/2015/08/24/reuters-america-global-markets-asian-shares-resume-slide-o--fears-over-chinese-economy.html