Asian stocks tumbled as a deepening global recession drove down oil and metal prices and heightened concerns company earnings will collapse.
Woodside Petroleum Ltd. lost 6.5% in Sydney after crude sank to the lowest level in three years. JFE Holdings Inc., the world's third-largest steelmaker, slumped 8.8% as US and European manufacturing declined. Honda Motor Co. fell 6.9% as Japanese auto sales sank and Credit Suisse Group said the carmaker may lower earnings forecasts. Australia's S&P/ASX 200 Index traded 2.6% down after the central bank reduced interest rates by a more-than-estimated one percentage point.
"The US manufacturing report made it clear it's going to take a while before we get out of this recession,'' Mamoru Shimode, chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television.
The MSCI Asia Pacific Index dropped 3.3% to 79.92 as of 12:33 p.m. in Tokyo. About nine stocks fell for each that rose. The gauge has lost 49% this year, the steepest decline on record. Shares now trade at an average of 1.06 times book value, compared with as high as 2.6 times last year.
Japan's Nikkei 225 Stock Average lost 4.6% to 8,012.33. Canon Inc., the world's largest seller of digital cameras, slid 3.7% as the yen's strength against the dollar reduces the value of overseas sales.
Hong Kong's Hang Seng Index fell 4.6%. Sun Hung Kai Properties Ltd., the city's second-largest developer, declined 6.4% after HSBC Holdings Plc raised rates on new home loans by the most in 10 years.
Taiwan Semiconductor Manufacturing Co. slid 6.5%, pacing declines in Taipei, after cutting profit targets. All other Asian benchmark indexes retreated apart from China.
US futures, yields
Futures on the Standard & Poor's 500 Index rose 0.8% in New York. The S&P 500 dived 8.9% yesterday, breaking a five-day winning streak, the longest since July 2007. Investors bought Treasuries, driving yields on two-, 10-and 30-year US debt to the lowest on record yesterday, after Federal Reserve Chairman Ben S. Bernanke said the central bank my purchase securities to provide liquidity.
"Investors are once again becoming terrified of taking risk,'' said Ayako Sera, a strategist at Sumitomo Trust & Banking Co. in Tokyo, which manages $266 billion in assets.
Falling demand pushed manufacturers to cut output and jobs across the globe, threatening to a prolong a recession that started in the US a year ago, according to the National Bureau of Economic Research, a private, nonprofit group of economists based in Massachusetts.
Project delays
US manufacturing shrank last month at the fastest pace since 1982, the Institute for Supply Management said yesterday, while production in Europe contracted the most since the tally began in 1998, according to Markit Economics. Companies are also delaying construction projects. In Australia, Royal Dutch Shell Plc and Anglo American Plc postponed plans to develop a $5 billion coal-to-liquids project.
JFE slumped 8.8% to 2,115 yen and Kobe Steel Ltd., Japan's fourth-biggest steelmaker, retreated 6.2% to 152 yen. Aluminum Corp. of China Ltd., the nation's biggest producer of the metal, fell 7% to HK$3.44 in Hong Kong.
Raw materials producers also tumbled as crude led a collapse in commodity prices. Oil for January delivery sank 9.5% to $49.28 a barrel in New York yesterday, the lowest settlement since May 2005 and the biggest drop since Oct. 10. The contract fell as much as 2.1% to $48.27 in trading today.
Woodside lost 6.5% to 33.85 yen. Inpex Corp., Japan's biggest oil explorer, slumped 9.1% to 532,000 yen. BHP Billiton Ltd., the world's biggest mining company, slid 6.4% to $27.99. China Petroleum & Chemical Corp., Asia's largest refiner, slid 5.6% to HK$4.74 after saying weaker fuel demand will create a "tough market environment'' in the first quarter of 2009.
Gold, silver
Gold tumbled the most in eight months, dropping 5.2% to $776.80 an ounce yesterday. Silver futures fell more than 8% yesterday. Sugar, wheat, platinum and palladium also declined.
Honda lost 6.9%, while Fuji Heavy Industries Ltd., the maker of Subaru cars, declined 6.7%. The companies reported domestic passenger car sales declines for November of 22% and 17% respectively yesterday. Hyundai Motor Co., South Korea's largest automaker, fell 4.9% to 39,000 won after saying domestic sales retreated 34%.
Automakers will report US sales for November later today, with a 13th consecutive month of declines forecast.
Tata debt
US-traded receipts of Tata Motors Ltd., India's biggest truckmaker, plummeted 18% in New York after the company said it will pay as much as 11% to refinance loans used to acquire the Jaguar and Land Rover brands.
Indian S&P CNX Nifty Index futures for December delivery dropped 3% in Singapore today, the biggest fall in two weeks. The contract is derived from the 50 stocks on the underlying S&P CNX Nifty Index on the National Stock Exchange of India Ltd.
Taiwan Semiconductor retreated 6.5% to NT$38.15. The world's largest maker of chips designed by other companies cut its forecast for fourth-quarter sales and profitability after shipments fell on slowing demand.
Sun Hung Kai fell 6.9% to HK$57.95 after HSBC lifted interest rates on new mortgages by 50 to 75 basis points.
