Asian Stocks Fall as Manufacturing Declines; Woodside, JFE Drop

By Patrick Rial and Masaki Kondo

Dec. 2 (Bloomberg) -- Asian stocks tumbled, extending a global rout, as signs the global recession is deepening drove down oil prices and heightened concerns over company earnings.

Woodside Petroleum Ltd. retreated 6.9 percent in Sydney after crude declined to the lowest level in more than three years. JFE Holdings Inc., the world's third-largest steelmaker, slumped 8 percent on declines in U.S. and European manufacturing. Honda Motor Co. lost 7.8 percent as domestic sales fell and Credit Suisse Group said the carmaker will likely cut its profit forecast for the second time this year.

``The U.S. manufacturing report made it clear it's going to take a while before we get out of this recession,'' Mamoru Shimode, chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television.

The MSCI Asia Pacific Index dropped 3.1 percent to 80.06 as of 9:51 a.m. in Tokyo. About 15 stocks fell for each that rose.

Japan's Nikkei 225 Stock Average lost 4.3 percent to 8,033.60. Sony Corp., the maker of the PlayStation 3 game console, slid 3.8 percent as the yen's strength against the dollar reduces the value of repatriated overseas sales. All other benchmark indexes open for trading fell.

In New York, the Standard & Poor's 500 Index dived 8.9 percent yesterday, breaking a five-day winning streak, the longest since July 2007. In Europe, the Dow Jones Stoxx 600 Index declined 6 percent, its steepest slide since Oct. 15.

U.S.-traded receipts of Tata Motors Ltd., India's biggest truckmaker, plummeted 18 percent in New York after the company said it will pay as much as 11 percent to refinance loans used to acquire the Jaguar and Land Rover brands.

Indian S&P CNX Nifty Index futures for December delivery dropped 4.5 percent as of 9 a.m. in Singapore today, the biggest drop in three weeks. The contract is derived from the 50 stocks on the underlying S&P CNX Nifty Index on the National Stock Exchange of India Ltd.

Falling Output

Credit losses and writedowns have reached almost $1 trillion at global financial companies, causing lending to businesses and consumers to dry up. Falling demand pushed manufacturers to cut output and workforce across the globe, threatening to a prolong a recession that started in the U.S. a year ago, according to the National Bureau of Economic Research, a private, nonprofit group of economists based in Massachusetts.

U.S. manufacturing shrank last month at the fastest pace since 1982, the Institute for Supply Management said yesterday, while production in Europe contracted the most since the tally began in 1998, according to Markit Economics. The reports came after the China Federation of Logistics and Purchasing said the nation's manufacturing shrank the most on record.

Crude oil for January delivery sank 9.5 percent to $49.28 a barrel in New York yesterday, the lowest settlement since May 2005 and the biggest one-day drop since Oct. 10.

The yen appreciated to as much as 92.89 against the dollar, the strongest in a month, from 95.24 at the close of stock trading in Tokyo yesterday.

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