Asian Stocks Fall, Led by Exporters, Banks on U.S. Outlook

By Chua Kong Ho and Tomoko Yamazaki


Nov. 16 (Bloomberg) -- Asian stocks fell for a second day, led by Toyota Motor Corp. and Canon Inc., after Bank of Japan Deputy Governor Toshiro Muto said growth could be threatened if the U.S. housing slump spreads.

Mizuho Financial Group Inc. and HSBC Holdings Plc dropped on concern banks may report widening losses from U.S. home loans to borrowers with poor credit after Wells Fargo & Co. said yesterday it's the worst housing market since the Great Depression.

``You just don't see an end to the subprime housing-loan problem,'' said Soichiro Monji, who helps oversee $47 billion at Daiwa SB Investments Ltd. in Tokyo. ``Unless we see some light at the end of the tunnel, we can't expect the market to rise.''

The Morgan Stanley Capital International Asia Pacific Index fell 2.2 percent to 157.78 as of 1:16 p.m. in Tokyo. The index has lost 7.9 percent in November, set for its biggest monthly drop since September 2001.

All 10 industry groups on the measure dropped today, with a group of financial stocks as the biggest contributor to the decline.

Falling stocks worldwide have wiped out more than $1.8 trillion in global market value this month to Nov. 14, according to data compiled by Bloomberg.

Japan's Nikkei 225 Stock Average slid 1.6 percent to 15,150.68, while the broader Topix index slumped 2 percent. Benchmarks in other markets open for trading fell, except in New Zealand.

Exporters Decline

In the U.S, the Dow Jones Industrial Average decreased 0.9 percent to 13,110.05. The Standard & Poor's 500 Index lost 1.3 percent and the Nasdaq Composite Index slipped 1 percent.

Toyota Motor, which gets about 70 percent of its profit from operations in North America, fell 1.6 percent to 6,120 yen. Canon, the world's biggest seller of digital cameras, declined 1.6 percent to 5,480 yen. Other stocks tumbled on concern the U.S. housing recession will crimp demand from Asia's biggest export market.

The yen strengthened to 110.03 to the dollar at 10:21 a.m. in Tokyo from 111.26 at the close of the Tokyo Stock Exchange yesterday. A stronger Japanese currency decreases the value of companies' overseas earnings when translated into yen.

Samsung Electronics Co., South Korea's largest exporter, retreated 2.1 percent to 558,000 won. James Hardie Industries NV, the biggest seller of home siding in the U.S., dropped 1.7 percent to A$6.26 in Sydney.

Global Concern

``Global concern about the U.S. economy is pulling down shares,'' said Kee Ho Sam, who manages $1.8 billion of assets at UBS Hana Asset Management Co.

Mizuho Financial, the second-biggest publicly traded Japanese bank, declined 3.9 percent to 525,000 yen. Moody's Investors Service cut its financial strength outlook for the company to ``negative'' from ``stable'' because of losses related to U.S. subprime mortgages.

Mitsubishi UFJ Financial Group Inc., the biggest publicly traded bank, declined 3.6 percent to 927 yen. HSBC, Europe's largest lender, fell 1.7 percent to HK$136.40.

The Bank of Japan's Muto said in an interview yesterday that policy makers ``are fully aware'' growth in Japan would be threatened should the U.S. slowdown infect the rest of the world. The housing crisis and banks' reluctance to lend have yet to damp spending by U.S. consumers and companies, he added.

``Investors are concerned that financial institutions may see further losses related to the subprime loan issue,'' said Fujio Ando, who helps oversee about $1 billion in Asian equities as managing director at Chibagin Asset Management Co. in Tokyo.

Meanwhile, BHP Billiton Ltd. the world's largest mining company, advanced 0.7 percent to A$41.43, the biggest gainer on the regional measure. Production at its mines in Chile, including Escondida, the world's largest copper source, has resumed following a magnitude 7.7 quake earthquake on Nov. 14., the company said.

BHP's shares also rose after the Wall Street Journal said Rio Tinto, which is fighting a hostile takeover from BHP, is considering a counter-bid. Rio slipped 0.5 percent to A$133.90.

Both companies declined to comment on the report.