Asian stocks and US index futures fell as deteriorating credit markets forced new bailouts of Hypo Real Estate Holding AG and Fortis. The euro slumped to a 13-month low, while Treasuries advanced.
Japan's Mitsubishi UFJ Financial Group Inc. dropped by a record 9.9% and Australia's Macquarie Group Ltd. slid 8.6% after Germany agreed on a $US68 billion ($88 billion) package for Hypo and BNP Paribas SA said it take control of Fortis in Belgium and Luxembourg. Sumitomo Metal Mining Co. lost 7.8% after copper and gold prices sank amid concern a $US700 billion US bank bailout won't prevent a slowdown in global economic growth.
``It will probably be a rough week for global investors as they realize the credit crisis has a long way to play out,'' said Frederic Dickson, who helps oversee $US25 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. ``US action was an absolutely essential first step, and global intervention is needed.''
The MSCI Asia Pacific Index fell 3.6% to 100.84 as of 2:17 p.m. in Tokyo, headed for the lowest close since July 26, 2005. The US Standard & Poor's 500 Index futures fell 1.5%, while the euro fell 1.1% to $US1.3628.
Japan's Topix index lost 5% to 996.01, set to close below 1,000 for the first time since December 2003. Mitsui Fudosan Co., the country's largest real-estate company, tumbled after UBS AG slashed its recommendation.
All markets open for trading in Asia declined. South Korea's Kospi lost 4.4% and the won dropped 3.6%. China's CSI 300 Index fell 3.5%, as trading resumed after a one-week holiday.
Job losses
The MSCI Asia Pacific last week posted the biggest weekly drop since August 2007 on concern the US bank bailout will fail to stimulate demand for the region's exports. That took the gauge's valuation to 11.7 times estimated profit, which is cheaper than the US S&P 500 index's 13.1 times.
The S&P 500 fell 9.4% last week, the most since the September 2001 terrorist attacks, as US President George W. Bush signed the rescue package into law to stem a crisis that has claimed Bear Stearns Cos. and Lehman Brothers Holdings Inc.
The legislation enables the government to purchase non- performing assets from institutions and suspend an accounting rule requiring businesses to report losses if asset values fall.
US payrolls dropped 159,000 last month, the most in five years, the Labor Department said on Oct. 3. The world's largest economy has lost 760,000 jobs this year, compared with the 1.1 million created last year.
Bank rescue
Mitsubishi UFJ, Japan's largest bank, fell 9.8% to 801 yen. Mizuho Financial Group Inc. dropped 8.7% to 398,000 yen. Macquarie, Australia's largest investment bank, lost 10% to $35.
Germany and the nation's banks and insurers agreed on a 50 billion euro ($89 billion) package for commercial property lender Hypo after commercial banks withdrew support for an earlier proposal. BNP Paribas, France's biggest lender, also agreed to pay 14.5 billion euros to purchase Fortis units in Belgium and Luxembourg bank after a government bailout failed.
The UK government, which took over Bradford & Bingley Plc last week, is ready to offer further support to banks that may get into financial difficulty, said Chancellor of the Exchequer Alistair Darling.
The euro earlier reached $US1.3610, the lowest since Sept. 5, 2007. It fell to 141.97 yen, the weakest since May 18, 2006, as investors cut holdings of higher-yielding currencies funded in the Japanese currency.
Falling dominoes
``The euro zone is the second domino of the globe to be falling over after the US,'' said Alex Sinton, a senior currency dealer at ANZ National Bank Ltd. in Auckland.
Asian money-market rates stayed at the highest in more than nine months. Hong Kong's three-month interbank offered rate rose to 3.85%. The Tokyo interbank offered rate for such loans was unchanged at a nine-month high of 0.868%.
Sumitomo Metal, Japan's second-largest copper smelter, lost 7.7% to 847 yen. Newcrest Mining Ltd., Australia's biggest gold mining company, fell 4.1% to A$US26.46. Woodside Petroleum Ltd., Australia's second-biggest oil and gas producer, declined 2.8% to A$US48.62.
Bullion for immediate delivery was down 0.8% at $US829.35 an ounce. Copper declined 3.5% to $US5,800 a metric ton on the London Metal Exchange today. Crude oil fell for a fourth day in New York, dropping as much as 2.4% to $US91.60 a barrel. Power station coal prices at Australia's Newcastle port dropped 6.1% last week, a seventh decline.
Commodities fall
Datong Coal Industry Co., China's second-largest producer of the fuel by capacity, slumped by the 10% daily limit to 15.29 yuan in Shanghai. PT Bumi Resources, Indonesia's biggest power-station coal producer, tumbled 15% to 2,725 rupiah, extending a six-day, 19% slide.
The value of the 19 commodities in the Reuters-Jefferies CRB Index fell $US280.6 billion, or 43%, from its July 3 peak, a loss larger than their total worth two years ago, data compiled by Bloomberg show.
UBS AG's Hong Kong-based economist Duncan Wooldridge reduced his growth forecast in Asia excluding Japan next year to 6.1% from 6.9%, saying the region will face ``recession-like conditions.''
Buy Treasuries
Mitsui Fudosan slumped 7% to 1,741 yen, while Mitsubishi Estate Co., the second biggest, lost 6.2% to 1,827 yen. Sumitomo Realty & Development Co. slid 8% to 1,890 yen. UBS cut its ratings on the three companies to ``neutral'' from ``buy.''
Treasuries rose for a fourth day, sending two-year notes to their longest winning streak in six weeks. Two-year note yields fell 5 basis points to 1.53% as UBS AG, the largest Swiss bank, said the Federal Reserve will halve its benchmark interest rate to 1% by March 31 to combat a recession.
``It's time to start buying,'' said Hiroyuki Bando, chief manager for fixed income, equities and currencies in Tokyo at Mitsubishi UFJ Trust & Banking Corp. ``The economy will become weaker. Interest rates will go lower.''
Bloomberg News
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