US signals spook Asia

GLOBAL MARKETS

Asian stocks fell for second day, led by Toyota Motor Corp and AU Optronics Corp, after reports in the US pointed to slower growth in the world's biggest economy.

Bank of China slumped as the country's shares, the catalyst for a global rout this week, extended declines from records on concern they are too expensive relative to earnings. Taiwan's benchmark fell by the most in more than six months as investors returned from a national holiday to join the selloff.

The Morgan Stanley Capital International Asia-Pacific Index fell 0.7 per cent to 143.22 at 6:25 p.m. in Tokyo, adding to yesterday's 3 percent slump. It was its biggest two-day loss since June 13, as a retreat globally wiped out more than $1 trillion of stock-market value.

"Market gains had been very fast up until now, when in fact there were plenty of things to be cautious about such as the slowdown in the US and a correction in Chinese stocks,'' said Masayuki Kubota, who oversees $2.1 billion in assets at Daiwa SB Investments in Tokyo.

Softbank Corp led Japan's Nikkei 225 Stock Average to a 0.9 per cent decline after CLSA Asia said the company may restate its financial accounts. Indexes fell in Australia, Malaysia, Hong Kong and Singapore. South Korea is closed today. The Philippine Stocks Exchange Index rebounded 4 percent, the region's biggest gain, after yesterday's 7.9 per cent plunge.

The Dow Jones Industrial Average added 0.4 per cent in New York, while the Standard & Poor's 500 Index rallied 0.6 per cent. Federal Reserve Chairman Ben S Bernanke said there appeared no "single trigger'' for the rout in stocks and that there was a "reasonable possibility'' the US economy will strengthen.

Toyota Motor Corp, Asia's largest automaker, fell 2 percent to 7,860 yen. Canon Inc, Japan's most profitable electronics and office-equipment maker, dropped 1.1 per cent to 6,400 yuan. AU Optronics Corp., the world's No 3 liquid-crystal display maker, slid 2.3 percent to NT$46.60 in Taiwan.

Sales of new homes in the US dropped 16.6 per cent to an annual rate of 937,000 in January, lower than any economist had forecast in a Bloomberg News survey. Additionally, the Commerce Department said gross domestic product last quarter rose at a 2.2 percent annual rate, compared with an initial assessment of 3.5 per cent growth reported on January 31.

The Shanghai and Shenzhen 300 Index dropped 2.8 per cent. The gauge fell 9.2 percent on Feb. 27 from a record, before climbing 3.5 per cent yesterday. It has risen 21 per cent this year.

Bank of China, the nation's second-biggest listed lender, lost 2.7 per cent to 4.66 yuan. Industrial & Commercial Bank of China, the biggest, fell 3.1 percent to 4.75 yuan.

Chinese banks trade at an average 2.97 times this year's forecast book value in Hong Kong and 3.04 times in Shanghai, based on the closing prices of February 27, according to UBS AG. That compared with an average of 2.1 times for banks in global emerging markets.

"Valuations for the whole market are a bit high, making investors jittery,'' said Chen Shide, who manages about $212 million at GF Fund Management in Guangzhou. ``Some funds are also selling stocks that made substantial gains.''

Ping An Insurance (Group) Co., China's second-largest insurer, jumped 38 percent to 46.55 yuan in its Shanghai debut, bucking the slump in Chinese equities. Ping An sold 38.9 billion yuan ($5 billion) of shares in the world's biggest stock sale by an insurer. The offering drew near-record bids from investors.

"As a general rule of thumb, new stocks tend to go up in China regardless of the market conditions,'' said Zhou Guang, an analyst at China International Capital Corp. in Beijing. ``Scarcity certainly plays a part in Ping An's surge today.''