* Euro falls to level not seen since last May on Greek woes
* Market awaits EU summit after euro zone talks fizzle
* Portugal downgrade heightens aversion to riskier assets
* Stronger dollar dents commodities, oil
SINGAPORE, March 25 - The euro fell to a new 10-month low against the dollar on Thursday as Portugal's credit downgrade added to worries about debt in Greece and elsewhere in Europe, hitting riskier assets such as shares and commodities.
An EU summit starting Thursday will give signs of assistance for Athens after efforts to arrange a special euro zone meeting failed, with France and Germany discussing what role the International Monetary Fund might play.
The euro fell to below $1.33, which triggered stop-loss orders exacerbating its decline. It dropped as far as $1.3283 on trading platform EBS, the lowest since last May, before recovering to around $1.3350 in morning European trade.
"Short-term speculators are probably all short on the euro, but there are long-term investors who are patiently holding back," said Kazuyuki Takami, senior manager of foreign exchange trading at the Bank of Tokyo-Mitsubishi UFJ.
"But depending on the developments, those long-term investors could also start dumping the currency, taking it further and further down," he said.
The MSCI index of Asian shares outside Japan was flat, with losses in China and Hong Kong offset by gains in India, returning after a public holiday, and South Korea.
Japan's benchmark Nikkei 225 average edged up 0.1 percent, with tech shares such as Advantest Corp supported by hopes for strong earnings and by the yen's dip to a near two-month low against the dollar the previous day.
On the generally cautious market sentiment, Lorraine Tan, director of Asia equity research at S&P in Singapore, pointed to Portugal and concern about other possible downgrades.
Regional issues such as worries about more policy tightening in China were also taking a toll on sentiment, she added.
"You have to take a mid-term view," Tan said. "The markets are at a crossroads" in need of additional impetus, such as an improving corporate outlook.
Khiem Do, head of the Asia multi-asset group at Baring Asset Management in Hong Kong, said the markets were worried about the "domino effect" of what happens in Greece if investors turn on other countries with shaky finances.
They were also "perhaps a little bit concerned about how long the monetary normalisation process is going to last in strong economies like India and China".
A survey of U.S. investment managers conducted by Russell Investments suggests enthusiasm for the markets voiced at the end of 2009 has waned slightly.
Most notably, manager bullishness dropped 21 percentage points for non-U.S. (developed market) equities in the company's quarterly survey.
"The pain experienced during the global financial crisis is still very vivid, and investment managers are reacting strongly to any negative news -- whether it be the developments in Greece or the marginally negative economic reports that began the year in the United States," said Erik Ogard, director, Client Investment Strategies, at Russell Investments.
Wall Street fell overnight as the Portugal downgrade and a weak U.S. Treasury note auction fanned worries about sovereign debt, eclipsing data showing U.S. durable goods orders rose for the third straight month, which confirmed its economic recovery was on course.
The dollar held its strength, underpinned by views that a rise in U.S. yields could come quickly on the prospect that the Federal Reserve will further unwind liquidity measures.
The dollar index, a gauge of its performance against other major currencies, rose to a 10-month high 82.062 as the euro skidded, before retreating a bit.
Against the yen, the dollar slipped to below 92 yen having risen to a 10-week high of 92.42 yen on Wednesday.
Spot gold rose more than $1, regaining some ground after falling to a near six-week low in New York as the dollar strengthened.
Oil hovered below $81 after data showed a jump in U.S. crude stocks but a drop in oil product inventories, leaving uncertainty over the strength of demand recovery in the world's largest energy user.
Shanghai's benchmark third-month copper futures contract fell to 58,900 yuan a tonne, the lowest since March 16, before recovering to 59,310 yuan, slightly above the previous close.
Asian sovereign credit default spreads broadly widened on concerns about the fiscal health of euro zone countries. A weak response at an auction of U.S. Treasuries, to which much of the region's credits are benchmarked, also dragged on sentiment. (Additional reporting by Timothy Heritage in Brussels, Satomi Noguchi in Tokyo and Umesh Desai in Hong Kong)
