By Tomasz Janowski

In Washington, President Barack Obama will try later on Monday to overcome opposition from Republican lawmakers to parts of his plan to revive the rapidly shrinking U.S. economy by spending nearly $900 billion.

Markets see the plan as a key part of efforts to limit the damage from the crisis sparked by a U.S. housing slump that wiped out nearly $14 trillion in global stock market value last year, pushed several major economies into recession and put millions of jobs on the line.

South Korea, home to some of Asia's top manufacturers and exporters, reported a record 32.8 percent drop in exports in January from a year earlier, an ominous sign for Asia's fourth-largest economy and global trade in general.

"The fall was really shocking," said Jun Min-Kyoo, economist at Korea Investment & Securities.

"The collapse in exports would bring about negative growth this year," he said, adding that the central bank should cut rates by at least another half a point at its February 12 meeting.

The data raised the specter of South Korea sliding into its first recession in more than a decade and highlighted the collapse in demand for the region's best-sellers: cars, consumer electronics and ships.

Seoul shares fell 1.3 percent and the won currency slipped as economic fears outweighed optimism that the tech sector might start bottoming out.

India also showed more signs of the impact of the global crisis. Manufacturing activity contracted in December for the second month in a row and exports for the same month fell from a year earlier for the third straight month.

LOSSES, LOSSES

There was little to cheer investors in the world's second-largest economy either.

Japanese markets, already facing the country's longest-ever recession and a return of deflation, have been repeatedly jolted by news of losses suffered by manufacturing bellwethers such as Sony or Toyota Motor Co.

Panasonic shares fell 3.1 percent on Monday after a newspaper report, later confirmed by a source, said the world's biggest plasma TV maker will book a $3.9 billion annual net loss -- its first in six years.

Rival electronics maker Hitachi plunged 17 percent after it warned it would lose $7.8 billion due to sinking sales, suffering the biggest-ever full-year loss at a Japanese manufacturer.

Tokyo's Nikkei average fell 1.5 percent and stocks elsewhere in Asia-Pacific were down 2 percent by 0640 GMT, an MSCI index showed.

In Australia, news of a drop in house values and a survey marking the eighth consecutive month of manufacturing contraction set the stage for another hefty 1 percentage point interest rate cut on Tuesday and a new economic stimulus plan from the government.

Government data showed on Monday house prices fell 3.3 percent in the fourth quarter from a year earlier, eroding consumers' wealth and cementing expectations that the central bank will slash rates to a record low of 3.25 percent.

"The news has been so dismal that they almost have to cut by 100 basis points, and even a bigger move can't be ruled out," said Michael Workman, a senior economist at Commonwealth Bank.

Prime Minister Kevin Rudd said on Monday that the global downturn and efforts to keep the $820 billion economy growing will push the budget into a deficit and cost $73 billion in lost revenue over the next four years.

MORE STIMULUS?

China's Premier Wen Jiabao offered some glimmer of hope to anxious markets, saying the economy showed signs of recovery in the final days of 2008.

The world's main economic growth engine slowed sharply in the fourth quarter from heady double-digit growth rates of the past years that allowed China to leapfrog Germany to become the world's third-largest economy.

"During the last 10 days of December it started to get better," Wen told a business audience in London. "The goods piled up in port started to decrease and the price of industrial products started to rise."

A Chinese business survey also provided tentative evidence that the economy may be pulling out of its deep dive.

A purchasing managers' index produced for brokerage CLSA rose to 42.2 in January from 41.2 in December, indicating business is still getting worse but also showing that the pace of deteriorating had slowed for a second month in a row.

Still, Wen told the Financial Times that the authorities may provide "new, timely and decisive measures" to support the economy having already pledged to spend 4 trillion yuan ($585 billion) over the next two years.

Global miner Rio Tinto, for whom China is a key market, said on Monday it had held talks about selling some of its assets to Beijing's aluminum maker Chinalco, its biggest shareholder, as it seeks to cut debt in the face of slumping demand.

Market attention will shift later on Monday to Washington, where Obama will try to overcome Republicans' opposition to his spending plan by appealing to their sense of urgency.

"The thing I want all of them to remember, and the thing I am thinking of every single day, is the thousands of people being laid off from their jobs right now," Obama told NBC television.

Senior Republican senators warned on Sunday their party was unlikely to back the stimulus bill without changes to cut waste and ensure the package provides an immediate boost to the U.S. economy.

(Reporting by Reuters bureaus worldwide; Editing by Neil Fullick)