Asian Stocks Decline on Signs Global Recession Is Deepening

By Patrick Rial and Masaki Kondo

Dec. 1 (Bloomberg) -- Asian stocks fell, snapping a four- day winning streak as Australian profit growth slowed and Japan’s Morimoto Co. became the country’s second-largest bankruptcy this year.

BHP Billiton Ltd., the world’s largest mining company, slumped 4 percent in Sydney as a report showed Australia’s corporate profit growth slowed in the third quarter and as commodity prices declined. Mitsubishi Estate Co., Japan’s second-biggest property developer, lost 3.9 percent, leading declines among the country’s real-estate shares after Morimoto filed for protection from creditors.

The MSCI Asia Pacific Index declined 1.4 percent to 81.51 as of 10:32 a.m. in Tokyo, ending a four-day, 7.6 percent advance. The gauge has slumped 48 percent this year, set for the worst annual performance on record, as the U.S. housing slump sparked a global financial crisis that dragged the world’s biggest economies into recession.

“The deterioration of the economy has become increasingly clear,” Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television.

Japan’s Nikkei 225 Stock Average lost 2.1 percent to 8,337.65. Economic and Fiscal Policy Minister Kaoru Yosano told the Financial Times a proposed fiscal stimulus package is unlikely to boost the nation’s economy. Benchmark stock indexes throughout Asia also fell.

The U.S. Standard & Poor’s 500 Index added 0.7 percent on Nov. 28 on speculation government bailouts will shore up the economy. Target Corp. slumped as retailers extended discounts to lure shoppers amid what is forecast to be the slowest holiday shopping season in six years.

Black Friday

U.S. retail sales rose 3 percent the same day, the smallest growth for a “Black Friday” in three years, and compared with a gain of 8.3 percent last year, ShopperTrak RCT Corp. said. The day after the Thanksgiving holiday is considered to be when retailers begin to make the bulk of their yearly profit.

Oil for January delivery dropped 1.6 percent to $53.55 and is off 63 percent from a record reached in July. The Organization of Petroleum Exporting Countries deferred a decision on reducing production this year by two weeks when it met in Cairo over the weekend.

Copper futures fell 2.5 percent in New York on Nov. 28, the biggest drop for a most-active contract since Nov. 19. Stockpiles monitored by the London Metal Exchange rose to the highest level since February 2004, adding to evidence the global recession reduced demand for the metal used in pipes and wires.

In Japan, Morimoto filed for protection from creditors on Nov. 28 with 162 billion yen ($1.7 billion) of debt, nine months after its initial public offering. The bankruptcy was the second-biggest in Japan this year after that of developer Urban Corp. and pushed up the total number of failures of Japan’s listed companies to the most since World War II, according to research company Teikoku Databank Ltd.

Shrinking demand in the U.S. and mounting costs to dispose of nonperforming assets caused Japan’s biggest listed companies to collectively report a 32 percent drop in first-half earnings, according to data compiled by Bloomberg News.

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