Asian Stocks Drop to 3-Month Low This Week on Growth Concerns

Asian stocks fell to the lowest in more than three months, led by Toyota Motor Corp. and Samsung Electronics Co., on concern the effects of a U.S. housing slump will spread and slow growth globally.

Nintendo Co. dropped 5.4 percent this week after U.S. hiring slowed in December and unemployment increased to a two- year high. Taiwan Semiconductor Manufacturing Co. had its worst week in more than three years after the New York Times reported Merrill Lynch & Co. may take a bigger-than-expected $15 billion writedown for mortgage-related losses.

The view is strengthening that a U.S. recession is on the cards, said Jason Teh, who helps manage the equivalent of about $5.3 billion at Investors Mutual in Sydney. When things slow there it spills out to the rest of the world.

The MSCI Asia Pacific Index fell 2.8 percent this week to 151.70, the biggest drop since the period ended Dec. 14 and the lowest close since Sept. 18. Japan's Nikkei 225 Stock Average lost 4 percent to 14,110.79, the lowest since November 2005. Roughly twice as many of the benchmarks around the region declined as gained.

Toyota, Japan's largest automaker, fell 2.6 percent to 5,630 yen, and was the biggest drag on the regional benchmark. Samsung, South Korea's largest exporter, retreated 4.3 percent to 516,000 won.

U.S. hiring slowed last month, capping the worst year for job creation since 2003, and unemployment increased to 5 percent, the Labor Department said. Separately, Japan's car sales dropped in 2007 to the lowest in 35 years as wages fell and the population shrank.

Merrill Writedown?

Japan's economy has a 50 percent chance of slipping into a recession, Tetsufumi Yamakawa, Goldman's chief economist in Tokyo, wrote in a note yesterday. The U.S. economy may already be in recession, which will last two to three quarters and be relatively mild by historical standards, Goldman chief U.S. economist Jan Hatzius said in a separate note on Jan. 9.

Nintendo, the world's biggest maker of handheld game players, lost 5.4 percent to 60,200 yen in Osaka. Taiwan Semiconductor, the world's biggest custom-chip maker, dropped 8.3 percent to NT$55, its worst weekly performance since the period ended April 30, 2004.

A $15 billion writedown by Merrill, the third-largest U.S. securities firm, would be twice its own projection and more than the $12 billion analysts had estimated, according to a New York Times report yesterday. The world's biggest banks and securities firms have posted $97 billion in losses and writedowns on subprime-related assets, according to Bloomberg calculations.

Any subprime losses would drive the markets, said Nicole Sze, a Singapore-based investment analyst at Bank Julius Baer & Co. which manages $350 billion in assets worldwide. More writedowns could have a negative impact on the region.

China Financials Gain

ICICI Bank Ltd., India's biggest by market value, jumped 12 percent in the week to 1,439.9 rupees. The company may list four of its units or sell stakes to investors privately, said Chanda Kochhar, joint managing director at ICICI.

Citic Securities Co., Asia's largest brokerage by market value, rose 7 percent to 94.73 yuan in China. Last year's profit probably rose more than 400 percent, boosted by surging revenue from stock trading, the company said on Jan. 7.

China Merchants Bank Co., the nation's sixth-largest lender, added 2.6 percent to HK$31.90 in Hong Kong. Net income probably more than doubled last year, the company said.

Earnings from major Chinese financial companies have beaten market expectations by as much as 10 percent, said Fan Dizhao, who helps manage about $1.8 billion at Guotai Asset Management in Shanghai. That has provided a short-term boost.