Asian Stocks Fall on Deepening Recession Concern; BHP Declines

By Masaki Kondo

Feb. 2 (Bloomberg) -- Asian stocks dropped, led by commodity and technology companies, as shrinking factory output in Australia and declining corporate profits fueled concerns that the global recession is deepening.

BHP Billiton Ltd., the world’s biggest mining company, fell 2.8 percent in Sydney after Australian manufacturing contracted for an eighth month and metal prices declined in London. Hitachi Ltd., the world’s third-largest maker of hard-disk drives, fell 6.7 percent after projecting a record loss. Mizuho Financial Group Inc., Japan’s second-largest listed bank, declined 5.3 percent after posting its second quarterly loss in a row.

“We’ll likely continue to see a series of downward earnings revisions from companies and analysts,” Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television. “With more companies cutting dividends, domestic investors will likely shy away from the equity market.”

The MSCI Asia-Pacific Index lost 1.8 percent to 81.59 as of 9:54 a.m. in Tokyo. Four stocks declined for each that advanced on the gauge, which has lost 8.4 percent this year amid signs the global recession is eroding company profit growth.

Japan’s Nikkei 225 Stock Average dropped 2.4 percent to 7,806. Australia’s S&P/ASX 200 Index fell 1.4 percent. All markets open for trading declined.

In New York, the Standard & Poor’s 500 Index slid 2.3 percent on Jan. 30, capping a fourth weekly drop.

BHP lost 2.8 percent to A$29.61. Australia’s manufacturing index was 36.6 in January, the Australian Industry Group and PricewaterhouseCoopers said in a report today. A reading below 50 signals factory output is shrinking. Manufacturing accounts for a tenth of the nation’s gross domestic product.

Hitachi, Panasonic

Separately, a measure of six metals traded in London dropped for a second day on Jan. 30, losing 1.9 percent.

Hitachi lost 6.7 percent to 294 yen. The company reversed its profit forecast on Jan. 30 to a record net loss of 700 billion yen ($7.81 billion) for the year ending March 31. Demand in the automobile, semiconductor and industrial-equipment industries was declining “rapidly,” the company said.

Panasonic Corp., the world’s largest maker of consumer electronics, dropped 4.6 percent to 1,048 yen. The company may report a 350 billion yen net loss for this business year, the Yomiuri newspaper reported yesterday. The median of analyst estimates compiled by Bloomberg projected 6 billion yen in profit.

Mizuho, the Japanese bank with the biggest subprime writedowns in Asia, slumped 5.3 percent to 215 yen. The company turned to a 145.1 billion yen loss in the three months ended Dec. 31 from a 66 billion yen profit a year earlier.

Japanese companies from car manufacturers to electronics makers have cut their full-year earnings outlooks as the world’s largest economies plunged into recession. Domestic businesses reporting their third-quarter earnings have posted an 85 percent tumble in net income for the quarter, Tokyo-based Shinko Research Institute Co. said in a report dated Jan. 30.

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