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Update: Asia: Stocks slump on global growth concerns, US selloff; STI down 0.2%

The new head of Singapore Exchange Ltd, which was hit hard in its derivatives trading by China's economic slowdown, could face his toughest questions yet at an annual shareholders' meeting on Wednesday as pressure mounts to find new sources of revenue.

[SINGAPORE] Asian shares and emerging currencies fell on Monday (Sept 21) after the US Federal Reserve's decision to keep interest rates at record lows raised fresh concerns about growth globally, particularly in China.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 2 per cent, with Hong Kong down 1.2 per cent, Australia 2 per cent and South Korea 1.6 per cent. Japanese markets are shut through Wednesday.

China was the sole Asian market to defy the downtrend, with the Shanghai Composite index up 1.1 per cent and the CSI300 rising 1 per cent.

The Straits Times Index pared earlier losses wo trade down 0.21 per cent at 2,873.65 as of 2:56 am.

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European markets were set to follow suit, with financial spreadbetters expecting Britain's FTSE 100 to slip 0.4 per cent, Germany's DAX 0.5 per cent, and France's CAC 40 0.2-0.3 per cent.

US stock futures slipped 0.4 per cent during the Asian day, suggesting further weakness on Wall Street after major indexes fell more than 1.3 per cent on Friday on worries that slower overseas demand will hurt corporate profits.

Investors will be focusing on flash manufacturing activity readings from China and the eurozone on Wednesday for pointers on where the global economy is heading.

A Reuters poll showed economists expect the flash September China factory PMI headline reading to edge up to 47.5 from a final reading of 47.3 in August.

But it likely remained near 6/1-2-year lows, pointing to a seventh straight contraction in activity on a monthly basis."It looks like a continuation of the growth worries that have hampered markets for the last few months now," said Shane Oliver, head of investment strategy at AMP Capital in Sydney. "European and US shares had sharp falls, after initially benign reactions to the Fed, and this is now flowing through to Asian markets today," he said.

Global markets have recoiled after the Fed opted on Thursday to hold rates steady, saying it would like to see further improvements in US labour markets and inflation and stressing that the global economic outlook appeared less certain.

The US dollar, which retreated after the Fed decision, rose 0.3 per cent to 95.365 against a basket of six currencies but slipped 0.1 per cent to 119.86 yen on Monday.

The euro was little changed at US$1.1312.