Asian stocks slide on US slowdown fears

Asian stocks fell, resuming a sell-off that halted last week, as climbing US home-loan delinquencies suggest the world's biggest economy is slowing.

"There's concern if the US slows it will affect the rest of the world,'' said Shane Oliver, who helps manage about $64 billion at AMP Capital Investors Ltd in Sydney. "It's a continuation of the correction that never really ended.''

Samsung Electronics Co, which accounted for about 16 per cent of South Korean exports last year, posted its biggest drop in eight months. Toyota Motor Corp and HSBC Holdings Plc declined the most since the end of this month's slump.

The Morgan Stanley Capital International Asia-Pacific Index lost 2.5 per cent to 140.37 in Tokyo, its biggest drop since March 5. US stocks tumbled yesterday, continuing a rout that wiped about $3.3 trillion off global markets.

Standard & Poor's 500 Index futures lost 0.1 per cent. Japan's Nikkei 225 Stock Average and the broader Topix index lost 2.9 per cent. Benchmarks elsewhere slid more than 1 per cent, except in Thailand and Pakistan. In China, which triggered the recent slide, the Shanghai and Shenzhen 300 Index dropped 1.6 per cent.

US stocks wiped out three days of gains after growing mortgage delinquencies heightened concern a home-loan crisis is spreading across the economy.

A gauge of financial shares on the S&P 500 fell 3.2 per cent, while homebuilders lost 4.6 per cent.Benq Corp fell by the daily limit in Taiwan after Chief Financial Officer Eric Yu was detained by officials investigating possible insider trading at the company, according to the prosecutor's office. Nikko Cordial Corp jumped by the exchange-imposed maximum after Citigroup Inc raised its takeover offer.

Mortgage concerns:Samsung Electronics, the world's biggest maker of liquid crystal displays, dropped 2.7 per cent to 584,000 won. It was its largest slump since July. Toyota, Japan's biggest automaker, lost 3.2 per cent to 7,540 yen. It generated more than a third of its financial year 2006 revenue in North America.

HSBC, Europe's biggest bank by market value whose second-half pretax profit in North America plunged 87 per cent due to loan defaults, fell 1.5 per cent to HK$135 in Hong Kong.

A report by the Mortgage Bankers Association in the US showed that in the fourth quarter about 2.57 per cent of so-called prime borrowers were at least 30 days late in their mortgage payments, the highest level in almost four years. Delinquencies for subprime, or higher risk, borrowers reached 13.33 per cent, also the most since 2003's second quarter.

Falling consumption:"The subprime default issue won't just be a short-term impact,'' said Chang In Whan, president of KTB Asset Management Co in Seoul, which has about $3.2 billion in equity assets.

"It will continue to affect markets in the first and second quarters.The bad loans will lead to a fall in US home prices, which will damp consumer spending and slow the economy.''

Retail sales in the US rose a less-than-forecast 0.1 per cent in February as the coldest February in more than a decade kept shoppers at home. Economists in a Bloomberg News survey had predicted a 0.3 per cent increase.

Honda Motor Co, Japan's second-largest automaker, slid 3.5 per cent to 4,110 yen. The company had 55 per cent of its sales in North America in the year to March 31. James Hardie Industries NV, the biggest supplier of home siding in the US, lost 3.4 per cent to A$8.60.

Taiwan Semiconductor Manufacturing Co, the world's largest maker of customised chips, fell 1.7 per cent to NT$67.90.

Singapore's Chartered Semiconductor Manufacturing Ltd, which makes chips that power Microsoft Corp's Xbox 360 game console, dropped 5.4 per cent to S$1.40.

Key driver: "A slowdown in demand in the housing market will mean a drop in consumption for electronics and appliances that go into houses,'' said Yin Nai-yun, who oversees $172 million at Prudential Securities Investment Trust Enterprise in Taipei.

"The housing market is a key driver in the US economy.'' China's Shanghai and Shenzhen 300 Index had its biggest decline since March 1 amid concern its 27 per cent climb this year has outstripped prospects for earnings growth. A 9.2 per cent tumble in the index on February 27 was among the catalysts for a five-day rout in global stock markets.

Citic Securities Co, China's biggest publicly traded brokerage, declined 4.5 per cent to 41.39 yuan. The shares have surged 56 per cent this year. China Merchants Bank Co, the nation's third-biggest publicly traded lender, lost 2.8 per cent to 15.54 yuan.

"As indexes move higher, investors become more jittery about valuations and tend to sell shares,'' said Fan Dizhao, who helps manage the equivalent of $1.8 billion at Guotai Asset Management Co in Shanghai. "The market is at a frenzy now as more than 800 stocks have risen more than 50 per cent so far this year.''

Benq, Taiwan's biggest maker of branded consumer electronics, slumped 6.8 per cent to NT$13.05. Chief Financial Officer Yu, 51, was denied bail and can be detained for up to four months, Chang Chin-fung, deputy prosecutor of the Taoyuan District Court, said on Wednesday in an interview.

Prosecutors are investigating trading in Benq stock early last year, just before the Taoyuan, Taiwan-based company reported a loss, Chang said. The probe started at the request of Taiwan's Financial Supervisory Commission and prosecutors yesterday raided the company's headquarters and Taipei office.

Nikko Cordial, Japan's third-largest brokerage, jumped 13 per cent to 1,690 yen. It was the biggest percentage gainer among the 1,895 stocks in the Morgan Stanley Capital International World Index.

Citigroup Inc increased its takeover offer for Nikko yesterday by 26 per cent to $13.4 billion. The new 1,700 yen-per-share offer represents a 14 per cent premium over yesterday's closing price of 1,490.