Asia feels US pinch

GLOBAL MARKETS/ STOCK REPORT

Asian stocks fell, with the region's benchmark sliding the most in two weeks, after a surprise contraction in US service industries further fueled concerns that the world's largest economy is in a recession.

Nintendo and Li & Fung, reliant on the US for more than a third of their sales, led declines. BHP Billiton had its biggest slump since December 1987 after it raised a bid for Rio Tinto Group and reported a drop in profit. PetroChina led commodity producers lower after oil and metals prices retreated.

The MSCI Asia-Pacific Index slipped 3.4 per cent to 142.10 as of 7:01 pm in Tokyo, the most since January 22. Hong Kong's Hang Seng Index slid 5.4 per cent, more than any index in the world, ahead of Lunar New Year holidays.

Markets in China, South Korea, Taiwan and New Zealand were closed on Wednesday. Hong Kong and Singapore shut after morning trading.

The Nikkei 225 Stock Average lost 4.7 per cent to 13,099.24, the biggest decline since January 22.

EUROPE
European stock-index futures declined, following a retreat in US and Asian equities, on speculation profit growth will slow as the global economy cools.

Volvo AB, the world's second-largest truckmaker, and LVMH Moet Hennessy Louis Vuitton, the largest luxury-goods maker, may retreat after reporting earnings that missed analysts' estimates. BHP Billiton will probably drop after the mining company raised its offer for Rio Tinto Group and reported a decrease in profit.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, declined 25 points, or 0.7 per cent, to 3,706 at 7:34 am in London.

The Stoxx 600 has lost 13 per cent this year on concern credit-market turmoil might curb profit.

US
US stock-index futures were little changed. Walt Disney, the second-largest US media company, and JDS Uniphase rose in Europe after reporting first- quarter earnings that beat analysts' estimates.

General Motors, the world's biggest automaker, and Ford Motor, dropped after Bear Stearns lowered its recommendation on the shares.

Standard and Poor's 500 Index futures expiring in March added 1.7 points to 1,344.9 at 10:03 am in London. Dow Jones Industrial Average futures gained 2 points to 12,322. Nasdaq-100 Index futures increased 0.75 points to 1,785.75.

US stocks tumbled the most in three weeks yesterday after service industries contracted at the fastest pace since 2001, reinforcing concern the economy is in a recession.