Oil falls below $109, dollar at 11-month high

* Oil falls below $109, dollar hits 11-month high

* Nikkei closes up 0.6 pct, other Asia shares lower

* Coca-Cola offers to buy Chinese juice maker for $2.5 bln

HONG KONG, Sept 3 - Fear of a global economic slowdown pushed oil prices below $109 a barrel on Wednesday and pushed the dollar to an 11-month high.

MSCI's index of Asia stocks outside Japan fell more than 1.5 percent, dragged by resource-related stocks in the main Hong Kong, Singapore and Sydney indexes.

Oil prices came under pressure on worries about economic growth and as concerns receded about Hurricane Gustav hurting Gulf of Mexico oil production.

The prospect of cheaper fuel and lower inflation gave a boost to a few stocks, such as Japanese exporter Honda Motor Co, which gained 5.1 percent, helping the Nikkei average to close up 0.6 percent.

But most shares suffered as the bigger picture began to bite.

"Sentiment towards falling oil prices has changed quite fast... Investors are quite afraid of what this means in terms of a global slowdown," said Y.K. Chan, strategist with Philip Capital Management in Hong Kong.

Suspected dollar-selling intervention by South Korean authorities lifted the won from a four-year low, but failed to stop the currency from deepening its losses this year to more than 18 percent.

In contrast, Korean shares recouped some recent losses and bonds jumped higher after two days of market turmoil on fears of hefty capital flight from Asia's fourth-biggest economy.

Still, foreign investors were net sellers of Korean stocks for a 12th consecutive trading session, although the pace of the sales weakened significantly.

The main stock indexes in China, Taiwan and Singapore saw losses of between 1.2 and 1.9 percent.

Indian markets were shut for a public holiday.

The Hong Kong market gained some support from Huiyuan Juice, whose shares shot up after Coca-Cola offered to buy the company for $2.5 billion, or HK$12.2 a share - three times its last market price and equal to the stock's all-time high. The shares soared more than 160 percent.

The drag from resources shares, however, pushed the Hang Seng down 2.2 percent to a two-week low.

In Australia, stocks fell more than a percent as the world's top miner BHP Billiton slipped about 3.4 percent, while its takeover target Rio Tinto fell nearly twice as much after the European Commission added uncertainty to BHP's hostile offer, suspending the clock on its competition probe.

OSPRAIE DIVES

Dealers expected more volatility in commodity prices after a big U.S. hedge fund, Ospraie Asset Management, announced it was shutting its flagship commodities product after steep losses.

Ospraie is 20 percent-owned by Lehman Brothers, itself in focus after Korea Development Bank said it was talking to the U.S. bank about taking a stake.

Lehman shares fell more than 3 percent in Tuesday after-hours trading.

Ospraie's troubles and tumbling oil prices led investors to liquidate bets on higher-yielding commodities and currencies.

The euro hit a seven-month low against the dollar and sterling slumped to a 2-½ year low as market players cut positions before policy decisions by the European Central Bank and the Bank of England on Thursday.

The Australian and New Zealand dollars fell more than 1 percent to a one-year low against the dollar. Selling of the Aussie picked up after data showing Australian economic growth slowed slightly more than expected in the second quarter.

The sharp slide in the euro and Aussie has also forced players to cut back on carry trades in which the low-yielding yen was used to fund positions in higher-yielding currencies.

"Investors are unwinding positions in the yen crosses on the growing view that these currencies have now entered a medium- to long-term downtrend," said Hiroshi Yoshida, a trader at Shinkin Central Bank.

The dollar index, which tracks its performance against six major currencies, was up 0.6 percent 1000 GMT just off the 11-month high touched earlier in the day.

U.S. crude oil was more than a dollar lower at around $108.50 a barrel in Asian trade, having lost more than $6 since Friday, dipping below its 200-day moving average of around $111 on Tuesday for the first time since May 2007.

"It's the economy, economy, economy. Everyone's worried about demand destruction," said Robert Nunan, a risk management executive at Tokyo-based Mitsubishi Corp.

"The market is bearish short- to medium-term, although it has been supported by other factors such as the hurricane and the situation in Russia and Georgia," he said.

Japanese government bonds pushed higher, with the market still enjoying the after-glow of a 10-year debt auction that highlighted solid investor demand at current yields.

"In the yen bond market, it looks like economic deceleration factors will continue to lend support for some time," said JGB strategists at Barclays Capital in a note to clients.

Analysts also said the market was taking in its stride this week's surprise resignation of Yasuo Fukuda as prime minister. Former foreign minister Taro Aso has emerged as the frontrunner to succeed Fukuda.

Benchmark 10-year yields fell 3.5 basis points to 1.455 percent, holding near a four-month low of 1.400 percent.