Asian stocks fall, oil eases towards $58

HONG KONG, Nov 20 (Reuters) Asian stocks fell on Monday, drawing no benefit from a drop in the oil price towards a barrel after weak US housing data fuelled worries about the health of the US economy, Asia's top export market.

Japanese government bond (JGB) yields followed US Treasury bonds lower after a sharp decline in housing starts and housing permits supported the view that US interest rates would head lower in 2007.

The dollar was steadier after a fall on Friday and gold edged higher to about 3.50 an ounce.

Housing starts dropped 14.6 percent in October to an annual pace of 1.486 million, the lowest level in more than six years, while building permits fell 6.3 percent to a 1.535 million unit pace, the weakest in nearly nine years.

By the end of the morning session, Tokyo's Nikkei average <.n225> had fallen 1.34 percent, also under pressure from weakness in the big banks such as Mitsubishi UFJ Financial Group Inc. (MUFG) ahead of results later in the day.

MUFG shares were down 2.11 percent, ''Wall Street's advance looks like it might be about to stall,'' said Tatsuyuki Kawasaki, director of equities trading at Keneyama Securities.

Major exporters such as Japan's Honda Motor and Canon Inc. both fell more than 1 percent, while South Korea's top auto maker, Hyundai Motor , slid 2.14 percent.

Shares in Sony and Nintendo eased, but they fared better than the wider Japanese market after the two firms launched new video game consoles in the United States to strong demand over the weekend.

In Australia, Telstra dropped 3.73 percent after the government nearly doubled the size of its share sale in the top phone company.

Bucking the weaker trend, Australia's Seven Network surged 15.69 percent after it said it would form a media joint venture with private equity group Kohlberg Kravis Roberts [KKR.UL] worth A billion (