Asian shares slump 4 pct on U.S. auto fears

Asian shares slumped and were headed for their biggest daily fall in four weeks, while U.S. Treasuries gained after a U.S. task force rejected turnaround plans for automakers GM and Chrysler.
S&P stock futures dropped and European shares opened lower, with investors also spooked by news on Sunday that Spain would bail out regional savings bank Caja Castilla La Mancha, marking yet another official rescue of a firm hit by the global crisis.
Europe's FTSEurofirst 300 .FTEU3 fell 1.2 percent in early dealings on Monday and Spanish bank shares fell up to 8 percent.
The U.S. announcement by the White House autos panel marked a stunning reversal for GM and Chrysler and raises the prospect of bankruptcies that could further debilitate the already ailing U.S. economy.
The news sparked a fresh wave of risk aversion among investors, boosting the yen and U.S. Treasuries and setting back a stocks rally that started in earlier March on optimism the global economy may be bottoming out and the United States may finally be getting to grips with toxic debt on banks' books.
News on the U.S. auto firms comes ahead of a busy week that will feature the G20 gathering in London, a policy meeting by the European Central Bank, and employment data in the United States.
"Anything that spells of rejection in terms of bailout these days is not treated very well. We've seen threats of this before on other things, and it tends to spook the market a bit," said David Spry, a research manager at F.W. Holst in Sydney.
The MSCI index of Asia-Pacific stocks outside Japan extended its slide after the autos news. It was down 4 percent as of 0610 GMT.
The gauge was headed for its biggest daily percentage fall since a 4.3 percent decline on March 2, when fears about U.S. insurer AIG (AIG.N) had sent global stock markets stumbling.
Asian stocks went on to hit their 2009 low on March 4, before staging a spectacular recovery that as of last week had raised the Asia MSCI index outside Japan by 26 percent.