Sub-prime, oil bog Asia

GLOBAL MARKETS/ STOCK REPORT

Asian stocks fell, sending the region's benchmark to its biggest decline in two weeks, on concerns that banks will report more subprime-related losses and after oil surged above $100 a barrel.

Mitsubishi UFJ Financial Group led banks lower after the Financial Times said Credit Agricole may announce further writedowns and KKR Financial Holdings deferred repayment on commercial paper debt.

The MSCI Asia Pacific Index fell 2.7 per cent to 142.12 at 6:33 pm in Tokyo, its biggest decline since February 6. It has slumped 9.9 per cent this year amid mounting losses related to investments in US sub-prime mortgages. A gauge of financial stocks had the largest loss among the index's 10 industry groups.

Japan's Nikkei 225 Stock Average sank 3.3 per cent to 13,310.37. Sumitomo Realty & Development Co had the biggest per centage decline on MSCI's Asian index, after a researcher forecast lower condominium sales in Japan.

All Asian benchmarks open for trading retreated except in Pakistan, where the Karachi Stock Exchange 100 Index rose 0.6 per cent to a record. EUROPE
European stock-index futures fell, after US and Asian equities retreated, as oil exceeded $100 a barrel and Alliance & Leicester reported a slump in profit.

Air France-KLM Group, Europe's largest airline, and chemical maker BASF SE may decline on oil. Alliance & Leicester, the second-worst performing UK bank in the past month, said profit tumbled 67 per cent in the second-half.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, slipped 40 points, or 1.1 per cent, to 3,776 at 7:45 am in London.

Europe's Stoxx 600 index added 0.2 per cent yesterday. The gauge has lost 11 per cent this year on concern the collapse of the US sub-prime mortgage market will send the US into a recession, hurting corporate earnings. US
US stock-index futures declined on speculation financial firms will post more writedowns and a report on Wednesday will show housing starts remained near the lowest level since 1991 last month.

Citigroup and Goldman Sachs Group dropped in Europe after KKR Financial Holdings LLC extended the repayment deadline on commercial-paper debt. AT&T retreated after Credit Suisse Group cut its recommendation on the largest US phone company.

Standard & Poor's 500 Index futures expiring in March fell 2.5 points to 1,352.9 as of 9:58 am in London. Dow Jones Industrial Average futures dropped 9 to 12,379 and Nasdaq 100 Index futures decreased 4 to 1,777.5.