Asian Stocks Decline for Fifth Day; Mitsubishi UFJ Leads Drop

By Patrick Rial and Shiyin Chen

Oct. 28 (Bloomberg) -- Asian stocks fell for a fifth day, led by financial and technology companies, after Mitsubishi UFJ Financial Group Inc. said it will sell new shares to raise capital and Canon Inc. slashed its profit forecast.

Mitsubishi UFJ, Japan's No. 1 publicly traded bank, plunged 15 percent after saying it plans to raise as much as 990 billion yen ($10.7 billion). Canon lost 4.6 percent. Santos Ltd. and Inpex Holdings Inc. fell more than 4 percent each after oil futures slumped to the lowest since May 2007.

The MSCI Asia Pacific Index lost 1.8 percent to 73.81 as of 9:53 a.m. in Tokyo, extending a four-day, 19 percent slump. The measure was set for its lowest close since August 2003, following a 53 percent drop this year on concern the widening financial crisis and slowing economic growth will hurt company profits.

The index now trades at less than 1 times book value, compared with the Standard & Poor's 500 Index's 1.6 times. S&P Futures rose 0.7 percent today.

Japan's Nikkei 225 Stock Average lost 1.6 percent to 7,050.79, led by banks. South Korea's Kospi Index retreated 2.5 percent. KB Financial Group Inc., the holding company for the nation's largest bank, slumped after the country's consumer confidence fell.

All 10 industry groups fell on MSCI's Asian index apart from materials stocks. BHP Billiton Ltd., the world's largest mining company, advanced 2.5 percent as copper and nickel surged more than 7 percent yesterday. The metals gained after sales of new houses in the U.S. unexpectedly rose in September, easing concern that a recession would damp housing demand.

Oil Prices

U.S. stocks fell yesterday, with the Standard & Poor's 500 extending its worst monthly decline since 1931. General Motors Corp. sank after Moody's Investors Service cut the largest U.S. carmaker's debt rating and the drop in oil prices dragged down energy companies.

Canon yesterday slashed its full-year net income target by a quarter, expecting profit to fall 23 percent from a year earlier as the stronger yen reduces the value of overseas sales. Canon and Sony Corp., which last week had cut its annual earnings target by 38 percent, forecast the dollar will average 100 yen.

A 1 yen gain against the dollar reduces Canon's annual operating profit by 9.9 billion yen ($106 million) and Sony's by 4 billion yen, the companies have said.

The yen fell today amid speculation Japan's central bank will sell its own currency for the first time since March 2004. The currency dropped to 92.93 against the dollar at 8:30 a.m. in Tokyo. It reached 90.93 on Oct. 24, the highest price since August 1995.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Chen Shiyin in Singapore at schen37@bloomberg.net