By Kyung Bok Cho and Chua Kong Ho
Oct. 31 (Bloomberg) -- Asian stocks fell, adding to the regional benchmark index's worst month ever, as a record three- day rally fizzled after companies slashed profit forecasts and metals prices tumbled.
Mazda Motor Corp. fell 14 percent and Pioneer Corp. lost 15 percent after projecting lower earnings. KB Financial Group Inc. fell 8.6 percent in Seoul after unit Kookmin Bank reported a worse-than-expected profit decline. BHP Billiton Ltd., the world's biggest mining company, slid 2.1 percent after stockpiles of metals jumped. U.S. futures fell and the yen rose.
``Yesterday's rally was too good to be true,'' Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages about $53 billion, said in an interview with Bloomberg Television. ``Investors are very likely to take this chance to lock in profits.''
The MSCI Asia Pacific Index retreated 2.1 percent to 86.38 as of 9:37 p.m. in Tokyo. The gauge jumped 17 percent in the previous three days as the U.S. and China cut interest rates and the Federal Reserve agreed to provide emerging markets with $120 billion. It's set to lose 19 percent this month, the most in the measure's 21-year history.
Japan's Nikkei 225 Stock Average lost 5 percent to 8,576.98, snapping a three-day, 26 percent advance that was the biggest since at least 1970. The index lost almost 300 points in the final 10 minutes of trading ahead of a three-day weekend.
The Bank of Japan cut its benchmark interest rate to 0.3 percent today in a split decision to help stave off a prolonged recession.
Japan Sell-Off
``Once investors confirmed the Bank of Japan's rate cut, they ran out of reasons to buy the market,'' said Hiroaki Kuramochi, head of equities at Tokai Tokyo Securities Co. in Tokyo. ``We saw some pension money pouring in during the last few days, and people were hopeful that we'd see that again near the close of trading today, but it never materialized, which helped spur a sell-off.''
Futures on the Standard & Poor's 500 Index fell 1.3 percent. U.S. stocks gained yesterday, with the S&P 500 advancing 2.6 percent to 954.09, after gross domestic product contracted less than economists had estimated.
Indonesia's Jakarta Composite Index jumped 7.1 percent, led by PT Bank Mandiri, after the nation's bourse doubled the range of stock-price gains to 20 percent. The JCI lost 5.7 percent this week to yesterday, compared with a 9.8 percent surge in MSCI's Asian index.
India's Sensitive Index added 8.2 percent, paced by Bharti Airtel Ltd., as markets reopened following yesterday's holiday. Benchmark indexes elsewhere in Asia climbed except China, Hong Kong and Singapore.
Mazda, Toyota
Mazda Motor Corp., which surged 50 percent in the previous three days, fell 14 percent to 213 yen in Tokyo. The company cut its profit forecast by 29 percent yesterday on falling U.S. sales and higher raw materials costs.
Toyota Motor Corp., Japan's biggest automaker, lost 4.4 percent to 3,730 yen. Honda Motor Co., the second largest, retreated 13 percent to 2,400 yen.
Pioneer Corp., a Japanese electronics maker, slipped 15 percent to 284 yen after widening its net loss forecast yesterday and replacing its president. Konica Minolta Holdings Inc., a Japanese maker of printers, fell 13 percent to 628 yen after cutting its full-year profit forecast by 40 percent on the higher yen.
The yen gained 0.9 percent against the dollar to 97.73 and rose for the first time in four days against the euro, adding 1.5 percent to 125.45. A stronger yen erodes the value of overseas earnings when repatriated, and led Canon Inc. and Sony Corp. to cut their profit forecasts earlier this month.
Metals Fall
KB Financial Group Inc., which owns South Korea's biggest bank, dropped 8.6 percent to 32,000 won. Kookmin posted a 29 percent drop in net income yesterday.
BHP, Australia's biggest oil producer, slid 2.1 percent to A$27.99. Sumitomo Metal Mining Co. dropped 5.8 percent to 721 yen, while Nippon Mining Holdings Inc. fell 6.8 percent to 289 yen.
An index of six metals traded on the London Metal Exchange fell 7.8 percent yesterday, the biggest decline since October 2004. Crude oil dropped 2.9 percent to $64.03 a barrel in New York in recent trading, and is poised for its biggest monthly retreat since trading began in 1983 on concern a U.S. recession will further curb fuel demand.
China's Shanghai Composite Index slid 2 percent, capping a 25 percent decline this month, its worst performance since February 1995, when Bloomberg began tracking the data. Bank of Communications Co., China's fourth-largest by value, dropped 4.2 percent to 4.33 yuan after third-quarter profit climbed at less than half the pace three months earlier.
`Worse than Expected'
The combined third-quarter profit of 1,601 Chinese publicly traded companies fell 9.6 percent from a year earlier, the Securities Times reported, citing its own calculations.
``Third-quarter results have been worse than I'd expected,'' said Fan Dizhao, an investment manager at Guotai Asset Management Co. in Shanghai, which oversees the equivalent of $5.1 billion. ``China's economy will likely slow further in the coming six months.''
Asia's biggest decliners this month were Japan's Elpida Memory Inc., and Citic Pacific Ltd., listed in Hong Kong.
Elpida, the nation's largest maker of computer-memory chips, tumbled 74 percent to 506 yen in October after the company swung to a loss in the fiscal first half and announced a plan to raise funds through a convertible bond sale. The stock rose 5.4 percent today.
Citic, a unit of China's largest state-owned investment company, fell 73 percent to HK$6.06 this month after predicting a $2 billion loss from unauthorized currency bets. The shares surged 21 percent today before the company suspended trading ahead of an announcement.
Best Performer
PT Bank Internasional Indonesia was Asia's biggest gainer in October, climbing 50 percent after Malayan Banking Bhd. offered to acquire the lender at a premium.
Higher net income drove Bank Mandiri, Indonesia's largest financial-services company, 20 percent higher today to 1,560 rupiah. Bharti Airtel Ltd., India's largest mobile-phone operator, rose 6.1 percent after reporting a 27 percent increase in second-quarter profit.
To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net; Chua Kong Ho in Shanghai at kchua6@bloomberg.net
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