By Kevin Plumberg HONG KONG (Reuters) - Asian stocks edged up in quiet trade on Friday, as investors sifted through the remains of a record sixth consecutive month of falls for global equity markets, hoping to find some bargains as 2008 winds down. Regional shares tacked on a sixth day of gains, though optimism was in short supply with deteriorating economic prospects for China and Japan as well as simmering political risks in India, where fighting raged on in Mumbai, and Thailand, where the prime minister has declared a state of emergency. The yield on the benchmark 10-year U.S. Treasury note was near its lowest in 50 years, below 3 percent, with bond dealers anticipating a deep and lasting U.S. recession. The cost of insurance against a U.S. government debt default, an unthinkable event, shot to record highs on Thursday, as concern grows about the scale of programs to prop up the financial system. Oil prices fell toward $53 a barrel, ahead of a meeting of OPEC ministers in Cairo to discuss the possibility of more supply cuts as global recession reduces energy demand. "On a range of measures, there is undoubted value to be found in many of the worlds equity markets," said Sarah Arkle, chief investment officer with Threadneedle Asset Management. "However, with economic and earnings expectations in a state of flux, there are also significant risks and translating valuation metrics into regional preferences is highly dependent on earnings and dividend inputs," Arkle said in a note on the outlook for 2009. Japan's Nikkei share average rose 0.6 percent with some stocks in the technology sector, such as Kyocera Corp, pushing the index higher for a second day. However, shares of Panasonic Corp, the world's largest plasma TV maker, dove 11 percent after it slashed its net profit forecast for the current business year by 90 percent. The MSCI index of Asia Pacific stocks outside of Japan climbed 1.3 percent, putting in on track for a sixth day of gains. The index was still locked in a steep downward trend that has knocked it down about 57 percent so far this year. Hong Kong's Hang Seng index rose 2 percent, led by China Mobile, whose recent gains and been lower than the broader market. POLITCAL RISK In Mumbai, Indian commandos were in the middle of confronting militants holding foreigners hostage, but the country's market regulator had asked the stock exchanges to be ready to start trading on Friday. India's central bank said trading in forex, money and bond markets would resume trading on Friday. Militants resisted police forces in three pockets of the financial capital, more than 24 hours after coordinated attacks left at least 119 people dead and more than 300 wounded. Meanwhile, in Thailand, escalating tension with anti-government protestors, who have besieged Bangkok's two airports, and security forces may weigh on the stock market and currency for a second day. "The outcome will likely be that domestic confidence remains subdued and, given the expected impact of the global recession, the baht will likely weaken versus the U.S. dollar in coming months," said Sebastien Barbe, senior economist at Calyon in Hong Kong. Investors are likely to keep an eye out for indications on how what is traditionally the busiest U.S. shopping day of the year pans out. Some retailers have already offered heavily discounted prices to shoppers to lure them ahead of what is expected to be a disastrous holiday sales season. U.S. light crude for January delivery fell to $53.61 barrel by 0315 GMT, having fallen by more than $1 earlier. The yen rose against the U.S. dollar in thin trade as fears of a long and deep global recession continued to highlight the relative safety of the low-yielding Japanese currency. Japanese industrial production slid more than expected in October and manufacturers warned of record cuts ahead, lifting Japanese government bond prices. The dollar traded at 95.27 yen, down slightly from late European trade on Thursday. The euro edged down to around 122.80 yen and was nearly flat against the dollar at $1.2890. The benchmark 10-year U.S. Treasury yield was at 3 percent, having plummeted 85 basis points in the last two weeks.

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