Asian Stocks Fall on Concern Over U.S. Auto Rescue; Honda Drops

By Chua Kong Ho and Patrick Rial

Dec. 12 (Bloomberg) -- Asian stocks fell, ending a five-day rally by the region’s benchmark index, after Senate Republicans blocked a plan to rescue U.S. automakers and the nation’s jobless claims soared to a 26-year high.

Honda Motor Co. and Hyundai Motor Co. dropped more than 4 percent on concern the largest U.S. auto manufacturers will go bankrupt, disrupting parts makers that also supply Asia. James Hardie Industries NV, the biggest seller of home siding in the U.S., slumped 8.1 percent. KB Financial Group Inc. tumbled 9.3 percent after South Korea’s central bank forecast the economy will expand at the slowest pace in 11 years in 2009.

The MSCI Asia Pacific Index fell 1.6 percent to 86.68 as of 9:18 a.m. in Tokyo, snapping a five-day, 11 percent climb. Nine of the 10 industry groups declined, with about five stocks retreating for each that advanced.

Japan’s Nikkei 225 Stock Average sank 3.4 percent to 8,423.63, ending its longest winning streak since May. Australia’s S&P/ASX 200 Index slid 1.8 percent. South Korea’s Kospi Index dropped 2.4 percent. The economy will grow 2 percent next year from an estimated 3.7 percent this year, the Bank of Korea said in its 2009 outlook in Seoul today.

Futures on the Standard & Poor’s 500 Index declined 2.6 percent today. The measure yesterday fell 2.9 percent, led by financial shares.

The MSCI Asia Pacific Index has fallen 44 percent this year, the worst annual performance in its two-decade history. The first simultaneous recession in the U.S., Europe and Japan since World War II has roiled equity markets globally.

Bailout Vote

A $14 billion automaker bailout plan for General Motors Corp. and Chrysler LLC lacks the votes to pass the Senate, as Republicans refused to endorse the package. General Motors has hired lawyers and bankers to provide advice on whether the company should file for bankruptcy, the Wall Street Journal reported on its Web site.

“This proposal isn’t nearly tough enough,” Senate Republican Leader Mitch McConnell of Kentucky said on the Senate floor. “We simply cannot ask the American taxpayer to subsidize failure.”

The number of Americans filing first-time claims for unemployment benefits surged to 573,000 last week, the highest level since November 1982.

To contact the reporter for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.netPatrick Rial in Tokyo at prial@bloomberg.net