Asian Stocks Slump as U.S. Production Drops, Commodities Fall

By Patrick Rial and Masaki Kondo

Nov. 18 (Bloomberg) -- Asian stocks retreated to a three- week low on concern the slowing global economy is stifling the outlook for profits.

Sony Corp., which gets a quarter of its sales from the U.S., declined 2.2 percent after manufacturing in New York contracted at the fastest pace on record and the yen rose against the dollar. Rio Tinto Group, the world's third-largest mining company, lost 1.8 percent as aluminum fell to a three-year low and copper dropped.

``We are seeing U.S. economic numbers break one bad record after another,'' Tsuyoshi Kawata, a senior strategist at Tokyo- based Nikko Cordial Securities Inc., said in an interview with Bloomberg Television. ``The slump in the U.S. economy will surely be substantial.''

The MSCI Asia Pacific Index lost 1.1 percent to 81.87 as of 9:56 a.m. in Tokyo, set for its lowest close since Oct. 10. More than two stocks fell for each that rose and nine of the 10 industry groups declined.

Shares on the gauge are valued at 10 times trailing earnings and fell to 8.2 times last month, the lowest level since at least 1995, Bloomberg data shows. MSCI's Asian index has lost 48 percent this year as the collapse of the U.S. mortgage market sparked $960 billion in losses and writedowns at financial companies and now threatens a global economic recession.

Japan's Nikkei 225 Stock Average slumped 2 percent to 8352.98. Samsung Electronics Co., the world's biggest computer- memory maker, led stocks lower in South Korea after a U.S. company moved to block imports of electronics containing Samsung chips, citing patent infringement.

Macquarie Jumps

Limiting losses in Australia, Macquarie Group Ltd., Australia's biggest securities firm, advanced 19 percent after profit beat analysts' estimates.

Futures on the Standard & Poor's 500 Index slipped 0.2 percent. In New York, the S&P slid 2.6 percent yesterday.

Sony, the maker of the PlayStation 3 game console, lost 2.4 percent to 2,040 yen. Canon Inc., the world's largest seller of digital cameras, declined 1.7 percent to 2,885 yen.

The Federal Reserve Bank of New York yesterday said its general economic index fell to minus 25.4, the lowest since tallies started in 2001. Readings below zero for the index signal manufacturing activity is shrinking.

Rio lost 1.9 percent to A$72.02 in Sydney. Newcrest Mining Ltd., Australia's largest gold producer, fell 4.2 percent to A$20.03.

Crude oil, which has lost two-thirds of its value from a record $147.27 a barrel in July, dropped 3.7 percent to $54.95 a barrel in New York yesterday, the lowest settlement since January 2007. A measure of six metals traded on the London Metal Exchange fell 3.3 percent.

Kansai Electric

Utilities shares advanced as the slump in oil prices boosted their profit outlook. Kansai Electric Power Co., the second- largest power producer in Japan, rose 1.9 percent to 2,480. Korea Electric Power Corp., South Korea's biggest electricity producer, rose 1.9 percent to 26,450 won.

Macquarie posted a 43 percent drop in profit to A$604 million ($392 million) for the six months to Sept. 30 as falling asset prices forced writedowns. That beat the average estimate of A$592.4 million from analysts surveyed by Bloomberg.

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