Asia down as yen gains

GLOBAL MARKETS/ STOCK REPORT

Asian stocks fell, led by Toyota Motor and Honda Motor, as the yen rose to its highest in seven weeks, increasing concern about profit growth.

Toyota dropped to its lowest since June 2006. HSBC Holdings retreated after Goldman Sachs cut its price estimate and said the bank may need to boost provisions for bad loans. China Mobile declined for a second day after ending talks to sell Apple's iPhone in China.

"Tuesday's market drop is due to the yen's appreciation and domestic demand weakening," said Kiyoshi Ishigane at Mitsubishi UFJ Asset Management Company in Tokyo. "I'm avoiding exporters because a stronger currency will work against these companies, and financials."

The MSCI Asia Pacific Index dropped 1.1 per cent to 150.45 at 7:08 pm in Tokyo. The Nikkei 225 Stock Average sank 1 per cent to 13,972.63, its first time below 14,000 since November 10, 2005.

Japan's market was closed for a holiday yesterday. All Asian benchmarks retreated except in Taiwan, where the Taiex index had its steepest two-day gain since May 19, 2004.

EUROPE
European stock-index futures declined after retailer Tesco reported disappointing holiday sales and Morgan Stanley downgraded drugmakers Sanofi-Aventis SA and Novartis AG.

Kingfisher, the region's largest home-improvement retailer, may drop after JPMorgan Chase lowered its recommendation on the stock. BP might retreat after Lehman Brothers Holdings downgraded the shares. Volkswagen may lead automakers lower after Credit Suisse Group cut its recommendation on the industry.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, fell 15 points, or 0.4 per cent to 4,260 at 7:37 am in London. The UK's FTSE 100 Index may decrease 14, according to Cantor Index, a betting firm. The Dow Jones Stoxx 600 is down 5.5 per cent this year on concern an economic slowdown and credit-market losses in the US will crimp profit growth.

US
US stock-index futures declined on concern banks will report further writedowns related to subprime mortages and lower payouts to investors.

Citigroup Inc fell in Europe before releasing fourth-quarter earnings and after the Wall Street Journal said the largest US bank will reduce its dividend. Genentech, the world's second-biggest biotechnology company, and Intel Corp also dropped.

Standard & Poor's 500 Index futures expiring in March lost 8 points to 1,412.20 as of 9:51 am in London. Dow Jones Industrial Average futures declined 56 points to 12,742, and Nasdaq 100 Index futures decreased 7 points to 1,948.

US stocks rallied yesterday, sending the Dow Average and Nasdaq Index to their biggest gains this year, after IBM's earnings beat forecasts. Shares of the world's biggest computer-services provider rose the most in five years in New York trading.