Asian stocks fell, erasing earlier gains, and US futures dropped on speculation that General Motors Corporation and Chrysler LLC will enter bankruptcy, overshadowing steps by central banks to prevent the global recession from deepening.
Bridgestone Corp, the world’s largest tiremaker by sales, tumbled 9.2 per cent and Honda Motor Company slid 6.2 per cent. Rio Tinto Group, the world’s third-biggest mining company, lost 12 per cent on concern it will have trouble refinancing debt and as metals prices slumped. Surfwear maker Billabong International fell 18 per cent, the most in five years, after saying first- half earnings will probably decline.
The MSCI Asia Pacific Index fell 0.6 per cent to 79.39 in Tokyo, reversing a gain of 0.8 per cent.
GM and Chrysler executives are considering accepting a pre-arranged bankruptcy to secure a multi-billion dollar government bailout, a person familiar with internal discussions said.
Japan’s Nikkei 225 Stock Average declined 1 per cent to 7,924.24. The nation’s businesses reduced investments at the fastest pace in six years last quarter as the global financial crisis darkened the outlook for exports.
