Asian Stocks Fall for Second Day on U.S. Rescue Plan Concern

By Chua Kong Ho and Patrick Rial

Sept. 24 (Bloomberg) -- Asian stocks fell for a second day on concern a proposed U.S. bailout for financial companies will be held up by lawmakers, and after copper and oil prices declined.

Sumitomo Mitsui Financial Group Inc. lost 3.1 percent and Rio Tinto Group, the world's third-biggest mining company, fell 1.9 percent. Mitsubishi UFJ Financial Group Inc., Japan's largest bank, declined 1.2 percent after agreeing to acquire as much as 20 percent of Morgan Stanley for $8.4 billion.

``A lot of political pressure is coming to bear on the plan, and it doesn't look like it's going to pass smoothly,'' said Koichi Ogawa, chief portfolio manager, at Tokyo-based Daiwa SB Investments Ltd., which manages $28 billion. ``The slowdown hitting the U.S. is extremely serious, and if some kind of fiscal response isn't made the global economy will take a big hit.''

The MSCI Asia Pacific Index lost 1 percent to 115.20 as of 10:17 a.m. in Tokyo. Seven of the 10 industry groups on the measure declined.

Japan's Nikkei 225 Stock Average dropped 1.4 percent to 11,920.25. Japan's markets were shut yesterday, when most other Asian markets fell.

U.S. stocks fell yesterday in the market's worst two-day slump in six years on concern Congress will hold up the $700 billion bank bailout that Federal Reserve Chairman Ben S. Bernanke said is critical to preventing a recession. The Standard & Poor's 500 Index dropped 1.6 percent, capping a two-day decline of 5.3 percent. S&P 500 futures gained 1.1 percent today.

Banks Decline

Sumitomo Mitsui, Japan's third-largest bank, lost 3.1 percent to 655,000 yen. Mitsubishi UFJ slid 1.2 percent to 889 yen. The lender said on Sept. 22 it agreed to buy 10 percent to 20 percent of Morgan Stanley, adding that it will start due diligence before determining a final price.

Nomura Holdings Inc., Japan's biggest securities firm, rose 2.3 percent to 1,463 yen after agreeing to pay less than a month's revenue for units of bankrupt Lehman Brothers Holdings Inc. in Asia and Europe.

Inpex fell 3.9 percent to 997,000 yen. Rio Tinto slid 1.8 percent to A$106.27.

Crude oil for November delivery fell 2.5 percent to $106.61 a barrel in New York and was recently trading at $106.92. Copper fell 3.2 percent to $3.152 a pound, the most since Sept. 5. Gold dropped 2 percent to $891.20 an ounce.

To contact the reporter for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.