Asian stocks head south

GLOBAL MARKETS/ STOCK REPORT

Asian stocks fell, with the region's benchmark set for its biggest monthly decline since September 2001, on concern the US and Japan are heading for recessions.

Mitsubishi UFJ Financial Group led Japanese banks lower after Goldman, Sachs & Co said the nation's economy may already be contracting. Nippon Steel Corp, the world's second- biggest steelmaker, dropped the most in five months after reporting lower profit.

Datang International Power Generation plunged after China's worst snowstorms in decades disrupted travel and cut energy supplies.

The MSCI Asia Pacific Index lost 3 per cent to 141.61 as of 7:10 pm in Tokyo, snapping a three-day, 10 per cent rally. The benchmark has fallen 10 per cent so far this year and volatility on Monday jumped to 62, the highest since October 1998, according to Bloomberg data. About 12 stocks retreated for each that rose.

The CSI 300 Index slumped 6.8 per cent in China, the market least favoured by the region's mutual funds, according to Citigroup. Japan's Nikkei 225 Stock Average lost 4 per cent to 13,087.91.

Hong Kong's Hang Seng Index plunged 4.3 per cent. Standard & Poor's 500 Index futures expiring in March slid 1.2 per cent recently in Asian trading, while those of the Dow Jones Euro Stoxx 50 Index fell 2.2 per cent.

Europe
The Stoxx 600 has been whipsawed this month, posting its biggest loss since the September 11 terrorist attacks on January 21 and its biggest gain since 2003 on January 24. The January 21 slump pushed the index into a bear market "" commonly defined as a 20 percent decline in a 12-month period.

"This isn't the time to go into the market,'' said William de Vijlder, chief investment officer at Fortis Investment Management in Brussels, which oversees $191 billion. "We'll still see a lot of volatility.''

The MSCI Asia Pacific Index lost 3 per cent, snapping a three-day, 10 per cent rally. The index's volatility on Monday jumped to 62, the highest since October 1998, according to Bloomberg data.

Japan's Nikkei 225 Stock Average lost 4 per cent. China's CSI 300 Index slumped 6.8 per cent, while Hong Kong's Hang Seng Index plunged 4.3 per cent.

US
US stock-index futures retreated, following declines in Asia and Europe, as concern deepened that global economic growth will slow.

Exxon Mobil, the largest US oil company, and Alcoa, the world's third-biggest aluminum producer, led commodities shares lower as crude oil and metal prices dropped. McDonald's Corp, the largest restaurant company, and American Express Co. fell in Europe before reporting earnings.

Standard & Poor's 500 Index futures expiring in March lost 11.1 to 1,323 as of 11:29 am in London. Dow Jones Industrial Average futures slipped 68 to 12,168. Nasdaq-100 Index futures retreated 18 to 1,775.5.

"We know that we are on a path of decline,'' said Lucy MacDonald, who helps manage $100 billion as chief investment officer of global equities at RCM in London. "What is needed is a stabilization in growth forecasts and earnings forecasts.''

A Commerce Department report due on January 30 will probably show economic growth slowed to 1.2 per cent in the fourth quarter as high oil prices and rising unemployment limited consumer spending, according to a survey of economists. Goldman, Sachs & Co said on Monday the Japanese economy may have entered a recession.

US stocks dropped for the first time in three days on January 25, led by financial companies, on concern banks will be saddled with more credit-market losses and the Federal Reserve won't cut interest rates enough to stimulate growth.