By Jonathan Burgos and Masaki Kondo
March 2 (Bloomberg) -- Asian stocks tumbled, dragging the Nikkei 225 Stock Average down the most in six weeks, and U.S. futures fell as declines in Japanese wages and South Korean exports fueled concerns the global recession is deepening.
Mitsubishi UFJ Financial Group Inc., Japan’s largest bank, retreated 6.8 percent as bond risk rose and the nation’s wage declines accelerated in January. Hynix Semiconductor Inc., Asia’s second-biggest maker of memory chips, slumped 4.2 percent in Seoul after the country’s exports dropped for a fourth month in February. BHP Billiton Ltd., the world’s largest mining company, lost 3.1 percent in Sydney as metal and oil prices slumped. Treasuries rose for the first time in a week.
“We don’t know yet how long this global recession will last,” said Hisakazu Amano, head of fund management at Tokyo- based T&D Asset Management Co., which oversees about $39 billion. “With the market dominated by an atmosphere of malaise and despair, there are few people who dare to buy.”
The MSCI Asia Pacific Index dropped 3.6 percent to 72.48 at 2:13 p.m. in Tokyo. The gauge has fallen 19 percent in 2009, extending last year’s record 43 percent tumble, as recessions in the world’s largest economies hurt earnings at companies from BHP to Toyota Motor Corp., the world’s largest automaker.
The Nikkei 225 Stock Average declined 4 percent, the most since Jan. 15, to 7,272.42. Hong Kong’s Hang Seng Index sank 3.8 percent, while South Korea’s Kospi slid 3.7 percent. All markets open for trading declined.
Commonwealth Bank of Australia fell 4.6 percent after Moody’s Investors Service downgraded the ratings outlook for the nation’s three biggest banks. Macquarie Group Ltd., Australia’s No. 1 investment bank, sank 7.1 percent, as it said it had no outstanding capital commitments to its listed funds. HSBC Holdings Plc, Europe’s biggest bank, was halted from trading in Hong Kong on speculation it may raise funds to bolster capital.
Worsening Recession
Futures on the Standard & Poor’s 500 Index dropped 1.7 percent today. The gauge fell 2.4 percent to a 12-year low on Feb. 27 after the Commerce Department said the U.S. economy shrank in the three months to December by the most since 1982. Citigroup Inc. tumbled 39 percent the same day as a government move to cut shareholders’ stakes in the company by 74 percent drove down U.S. bank stocks.
The worsening global recession has pummeled Asian exports, prompting companies from Toyota to Sony Corp. to fire workers and halt factory lines. Monthly wages in Japan fell 1.3 percent from a year earlier, after declining 0.8 percent in December, the Labor Ministry said in Tokyo today.
Mitsubishi UFJ tumbled 6.8 percent to 423 yen in Tokyo. Mizuho Financial Group Inc., Japan’s second-largest bank, lost 4.3 percent to 180 yen.
Government Support?
Governments from the U.S. to China and Australia have introduced policies this year to ease the financial crisis and revive the global economy. Japan may buy as much as 10 trillion yen ($102 billion) in corporate bonds held by banks, the Mainichi newspaper reported today.
“We’ll see more statistics that show the deterioration of the global economy,” Seiji Arai, a strategist at Mitsubishi UFJ Securities Co., said in an interview with Bloomberg Television. “In Tokyo, there is growing optimism that the government will take measures to shore up the stock market and implement additional economic measures.”
Even so, the European Union leaders spurned pleas for special aid for eastern Europe and a rescue package for automakers amid concerns over surging budget deficits.
The cost of protecting Asia-Pacific bonds from default jumped, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rose 17.5 basis points, according to ICAP Plc.
Copper, Oil
Hynix slumped 4.2 percent to 8,280 won. Samsung Electronics Co., the world’s biggest memory-chip maker, sank 2.3 percent to 466,000 won. South Korea’s overseas shipments decreased 17.1 percent in February from a year earlier following January’s record 33.8 percent slump, the government reported today.
BHP dropped 3.1 percent to A$27.95 as copper futures in New York lost 0.9 percent in after-hours trading, extending Feb. 27’s 2.6 percent drop. Oil in New York slipped 1.9 percent today.
Rio Tinto Group, the world’s third-largest miner, slumped 6.9 percent to A$44.01. Cnooc Ltd., China’s largest offshore oil producer, fell 5.9 percent to HK$6.40 in Hong Kong. Inpex Corp., Japan’s No. 1 oil explorer, lost 6.8 percent to 632,000 yen.
An index of finance stocks on MSCI’s Asia Pacific gauge was the biggest contributor to the regional measure’s decline today. The finance index is the worst performer of 10 industry measures this year, as credit-related losses at institutions worldwide swelled to more than $1.1 trillion.
Raising Capital
In Sydney, Commonwealth Bank fell 4.6 percent to A$28.43, Australia & New Zealand Banking Group slipped 2 percent to A$13.05, while Westpac Banking Corp. lost 3.9 percent to A$16.24. Moody’s downgraded its ratings outlook on the three banks to negative from stable as the economy slows and bad debts rise.
Macquarie, which last week said it had no plans to raise capital, fell for a 10th day, slumping 7.1 percent to A$15.78. The company said today it wasn’t planning to increase its investment in its listed funds.
HSBC’s Hong Kong shares, which were suspended today, ended last week at HK$56.95. The bank’s U.S.-traded receipts fell 5.1 percent to the equivalent of HK$53.99 on Feb. 27.
The lender may raise about 12 billion pounds ($17 billion) to bolster capital as bad U.S. loans erode earnings, said two people with knowledge of the situation. The lender will consider a rights offering, the people said.
Malayan Banking Bhd., Malaysia’s largest bank by assets, dropped 3.9 percent to 4.90 ringgit after announcing a $1.6 billion share sale to existing shareholders.
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net
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