Asia drops on US concern

GLOBAL MARKETS/ STOCK REPORT

Asian stocks fell the most in a month, erasing February's gain, on concern worsening credit losses at financial companies will push the US economy into a recession.

Japan's Takefuji posted its biggest decline in three weeks after saying it may lose as much as 30 billion yen ($291 million) on derivatives transactions.

Toyota Motor Corp. led Japanese exporters lower on concern the yen's advance to a three-year high will hurt profits. BHP Billiton fell as speculation of weakening demand dragged on copper prices.

"The U.S. economy is contracting, there's no doubt about it,'' said Tom Murphy, who helps manage the equivalent of about $1 billion at Deutsche Bank AG in Sydney.

The MSCI Asia Pacific Index lost 3.1 per cent to 142.91 as of 5.30 pm in Tokyo, set for its biggest decline since February 6. Japan's Nikkei 225 Stock Average slumped 4.5 per cent to 12,992.18, the biggest drop since February 6. Australia's S&P/ASX 200 Index lost 3 per cent, extending a four-month, 18 per cent decline that's its longest losing streak since 1992.

Europe
Stocks retreated in Europe led by financial companies, as investors speculated an economic slowdown and widening credit-market losses will cut profit growth. The US index futures fell.

UBS AG dropped for a third day in Zurich after Credit Suisse Group said the bank's writedowns may total $15 billion.

The MSCI World Index decreased 1 per cent to 1,441.06 at 10.08 am in London. Futures on the Standard & Poor's 500 Index lost 0.2 per cent before a report that may show manufacturing contracted.

The MSCI World has dropped 9.3 per cent this year on concern losses related to US subprime mortgages and a slowdown in the world's largest economy will curb earnings.

Europe's Dow Jones Stoxx 600 Index lost 1.5 per cent. France's CAC sank 1.4 per cent. Germany's DAX retreated 1.5 per cent and the UK's FTSE 100 slipped 1.4 per cent.

US
US stock index futures fell as investors speculated a report on Monday may show manufacturing contracted last month, adding to evidence that the economy is sliding into a recession.

American International Group Inc., the world's largest insurer, sank in Europe after billionaire investor Warren Buffett said industry profit margins will drop. Boeing Co. retreated after losing a half-century hold on a US Air Force program.

Standard & Poor's 500 Index futures expiring this month lost 5 to 1,326.3 as of 9.44 am in London. Dow Jones futures fell 85 to 12,221 and Nasdaq 100 Index futures decreased 7 to 1,741.25.