By Patrick Rial and Shani Raja
Nov. 26 (Bloomberg) -- Japanese and Thai stocks fell in Asia after Toyota Motor Corp.'s debt rating was cut and anti- government protesters shut Bangkok's main airport. South Korean banks gained after regulators said risks are being controlled.
Toyota dropped 4.6 percent after Fitch Ratings lowered the world's second-largest automaker's debt to AA. Thai Airways International PCL sank 5.8 percent. Rio Tinto Group slumped 34 percent, leading Australian shares lower, after BHP Billiton Ltd. dropped its takeover bid for the rival miner. Woori Finance Holdings Co. surged 15 percent in Seoul.
``Companies that have kept their balance sheets in order and have stronger business models will get through this better,'' said Hugh Dive, Who helps manage about $3 billion at Sydney-based Investors Mutual Ltd.
The MSCI Asia Pacific Index lost 0.3 percent to 79.77 at 3:58 p.m. in Tokyo. About eight stocks fell for every seven that gained. The measure surged 4.1 percent yesterday, the biggest in three weeks, fueled by a surge in commodity prices and the U.S. government's rescue of Citigroup Inc.
Japan's Nikkei 225 Stock Average dropped 1.3 percent to 8,213.22 on the lightest trading day of the year for Japan in terms of value. Other Asian benchmark indexes were mixed.
U.S. stocks advanced for a third day yesterday as the Federal Reserve committed an additional $800 billion to unlocking credit markets. The Standard & Poor's 500 Index swung between gains and losses more than 20 times before closing 0.7 percent higher. Futures on the index lost 0.4 percent in trading today.
Fed Assistance
The Fed said yesterday it will purchase as much as $600 billion of debt issued or backed by government-chartered housing- finance companies and establish a $200 billion program to shore up consumer and small-business loans.
More than half of stocks in Asia have sunk below their book value as the collapse of the U.S. housing market curbed consumer spending on Asian-made goods and reduced demand for fuel and other commodities. MSCI's Asian index has tumbled by 49 percent this year as the global economy slipped into recession.
Toyota slumped 4.6 percent to 2,985 yen. Fitch lowered its rating on the company and added that the weak auto market could trigger additional downgrades. The company has slashed production and sales forecasts in recent months to cope with a global recession that has eroded demand for expensive items such as cars.
Honda Motor Co. fell 1.9 percent to 2,050 yen. Denso Corp., the world's largest listed auto-parts maker, slumped 5.5 percent to 1,519 yen.
OECD Forecast
The Organization for Economic Cooperation and Development cut its 2009 growth forecast for its 30 members yesterday to a 0.4 percent contraction, from a previous estimat of 0.3 percent, and called on governments to use fiscal and monetary policy to ease the worst recession since the early 1980s.
``The fundamentals still have a while to go until there's a recovery,'' said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. ``If we see the economy take another turn for the worse, it could lead to new lows for the stock market.''
Thai Air sank 5.8 percent to 7.35 baht, on course for its biggest loss in a month, while Laguna Resorts & Hotel Pcl plunged 14 percent to 21.5 baht, the steepest slide since September 1999.
Four anti-government protesters were injured in an explosion outside Bangkok's international airport as demonstrators occupied its main terminal, seeking to topple the government for the second time since a 2006 coup.
Rio plunged 34 percent to A$42.01, the steepest decline since October 1987. BHP, the world's largest mining company and which would have controlled a third of the iron ore market if it combined with Rio, climbed 3.9 percent to A$27.25.
BHP yesterday scrapped its takeover offer for Rio saying the move would have increased the company's debt load and as seizure in credit markets and a global recession has led to slumping commodity prices.
Steelmakers Gain
Angang Steel Co. climbed 6 percent to 7.10 yuan, driving the region's steelmakers higher, on optimism the failed bid will keep iron ore prices lower.
``Competition between BHP and Rio Tinto would be good to steelmakers especially at a time when the market is in oversupply,'' Shan Shanghua, secretary-in-general of the China Iron & Steel Association, said. ``The takeover plan had been firmly objected by Chinese, Japanese and European steelmakers as it would create a monopoly in Australian ore.''
Baoshan Iron & Steel Co., China's biggest steelmaker, rose 3.9 percent to 5.01 yuan. South Korea's Posco, Asia's third- largest steelmaker, rose 3.8 percent to 330,000 won.
Woori surged 15 percent to 5,930 won in Seoul. Hana Financial Group Inc., which control's South Korea's fourth- largest lender, also advanced 15 percent to 14,850 won. KB Financial Group Inc., the holding company for Kookmin Bank, soared 15 percent to 27,600 won.
`Boosting Confidence'
Jun Kwang Woo, chairman of the Financial Services Commission, today ruled out any immediate measure to inject public funds into banks, which he said should focus on raising capital on their own.
``The regulator's comments are boosting confidence that Korean banks are capable of raising capital through their own efforts,'' said Ko Seoung Pil, who helps overseas almost $1 billion at HI Asset Management Co. in Seoul. ``I doubt Korean banks will deteriorate to a situation where they would need a government capital injection.''
Japanese property insurers gained after Mitsumasa Okamoto, an analyst at Merrill Lynch & Co. in Tokyo, said in a report the industry's shares have been oversold because declines in the value of insurers' assets have been minimal.
Tokio Marine Holdings Inc., Japan's biggest nonlife insurer, rose 7.1 percent to 2,275 yen. The stock plunged 36 percent last week after slashing profit forecasts. Mitsui Sumitomo Insurance Group Holdings Inc., which lost 30 percent in the same period, advanced 5.2 percent to 2,310 yen.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.
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