Asian Stocks Fall as Earnings Outlook Worsens; Confidence Drops

By Masaki Kondo and Patrick Rial

Nov. 11 (Bloomberg) -- Asian stocks dropped after Mitsubishi Materials Corp. cut its profit forecast and Australian business confidence fell to the lowest level on record.

Mitsubishi Materials, Japan's third-largest copper producer, declined 6.7 percent. National Australia Bank Ltd. tumbled 7.6 percent after selling shares at discount and as slumping business sentiment suggested the nation's economy may fall into a recession for the first time since 1991. Toyota Motor Corp., Japan's biggest carmaker, lost 2.9 percent after HSBC Holdings Plc said the shares have further room to fall because of poor earnings next year.

The MSCI Asia Pacific Index retreated 2 percent to 88.45 as of 9:54 a.m. in Tokyo. The measure jumped 3.5 percent yesterday after China unveiled a $586 billion economic stimulus package.

``In such a volatile market with low prospects for global economic growth, long-term investors are hesitant to buy in,'' Mamoru Shimode, chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television.

All Asian benchmark indexes open for trading dropped. Japan's Nikkei 225 Stock Average fell 3.1 percent to 8,800.19.

Australia's S&P/ASX 200 Index slumped 4.3 percent, set for its biggest decline in a month. The nation's sentiment index slid to minus 29 from September, the lowest level since the series began in 1989, according to a National Australia Bank survey of more than 400 companies conducted between Oct. 23 and Oct. 30.

In New York, the Standard & Poor's 500 Index slid 1.3 percent, led by financial shares after Barclays PLC said Goldman Sachs Group Inc. may have its first quarterly loss.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net.