Asian Stocks Fall in U.S. on Citigroup Loss, Recession Concerns

By Chen Shiyin and Masaki Kondo


Jan. 16 (Bloomberg) -- Asian stocks fell in U.S. trading after Citigroup Inc. reported a record loss and an unexpected drop in retail sales renewed concern the worsening housing slump is dragging the world's largest economy into recession.

Mitsubishi UFJ Financial Group Inc. may pace declines by lenders after Citigroup, the largest U.S. bank, cut its dividend by 41 percent and wrote off $18 billion for mortgage defaults.

Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. may fall after Intel Corp. posted fourth- quarter sales that missed analyst estimates and gave a forecast that disappointed investors, prompting the shares to plunge 14 percent.

Toyota Motor Corp. may lead exporters lower after U.S. retail sales fell in December for the first time since June. BHP Billiton Ltd. and PetroChina Co. may slide along with oil and metals prices.

``There's almost no news to spur investors to buy,'' Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc., said in an interview with Bloomberg Television.

The Bank of New York Co.'s Asia ADR Index, which tracks American depositary receipts of the region's companies, tumbled 4.7 percent to 154.84 yesterday, the biggest retreat since Bloomberg started tracking the data in December 2001.

Nikkei 225 Stock Average futures expiring in March were at 13,700 in Chicago, down from the close of 13,980 in Osaka and Singapore yesterday.

10-Day Slump

Autralia's S&P/ASX 200 Index lost as much as 2.8 percent in early trading, while New Zealand's NZX 50 Index slumped for a 10th day, its longest losing streak since the introduction of the index in 2001.

The Nikkei declined 1 percent to 13,972.63 yesterday, dropping below 14,000 for the first time since Nov. 10, 2005, and the Topix index fell 2 percent to 1,350.20, the lowest close since Sept. 16, 2005.

Investors will also be watching a Japanese government report due 10 minutes before the start of trading today that may show machine orders declined in November.

U.S. stocks tumbled yesterday, driving the Standard & Poor's 500 Index 2.5 percent lower. The benchmark has dropped 6 percent so far this year, its worst start since the first 10 trading days of 1978.

U.S.-traded receipts of Mitsubishi UFJ, Japan's largest publicly traded bank, dropped 2.8 percent yesterday from the closing share price in Tokyo. Mizuho Financial Group Inc., the second-biggest, slid 3.1 percent. Mitsubishi UFJ had subprime losses of more than 50 billion yen ($468 million) as of December, while losses at Mizuho may expand, public broadcaster NHK said.

Citigroup yesterday reported a fourth-quarter net loss of $9.83 billion, compared with a profit of $5.1 billion a year earlier. The company's markdown on subprime securities was almost doubled what it had forecast in November and the biggest so far among the world's top financial companies.

Intel's Forecast

Intel, the world's largest chipmaker, posted fourth-quarter sales of $10.7 billion, missing analysts' estimates of $10.8 billion. It's predicting first-quarter revenue of as little as $9.4 billion, short of analysts' estimates of $10.1 billion.

A measure of technology shares on the MSCI Asia Pacific Index has dropped 8.3 percent so far this year, the worst performer among 10 industry groups.

Samsung Electronics, the world's largest maker of memory chips, has lost 4.3 percent so far this year. Taiwan Semiconductor, the biggest supplier of made-to-order chips, has fallen 7.3 percent during the period.

Meanwhile, the Commerce Department said yesterday sales at U.S. retailers fell 0.4 percent, the first decrease since June.

`Disappointment'

``There is general disappointment with the pace of U.S. economic growth,'' said Nicholas Reitenbach, who helps manage $2.3 billion at Wilkinson O'Grady & Co. in New York. ``The world equity environment is now in a reactive mode.''

U.S.-traded receipts of Toyota Motor Corp., Japan's largest automaker, dropped 3.1 percent from the Tokyo close. Sony Corp., the world's second-biggest maker of consumer electronics, slid 2.8 percent.

Exporters in Japan may also decline after the yen climbed to as much as 106.60 against the dollar, the highest since June 2005. A stronger Japanese currency decreases the value of exporters' overseas sales when converted into yen.

A measure of six metals traded on the London Metal Exchange, including copper and nickel, slid 3 percent, the most in almost two months. Crude oil for February delivery dropped 2.4 percent to $91.90 a barrel in New York, the lowest close since Dec. 20.

BHP Billiton is the world's largest mining company and Australia's largest oil explorer. PetroChina is the country's top energy company.