ASIAN stocks declined for a second day, led by financial companies and power generators, on concern new US disclosure rules will reveal further credit losses and record oil prices will curtail earnings growth.
Mizuho Financial Group Inc, Japan's third-largest publicly traded bank, and ICICI Bank Ltd fell after US regulators told investment banks to disclose capital and liquidity levels. Tokyo Electric Power Co, Asia's No. 1 utility, dropped the most in a month after crude traded at US$123.71. Samsung Electronics Co and Honda Motor Co led exporters lower after reports showed US home sales fell and consumer debt rose.
"The market is worried about additional impairment losses," said Soichiro Kono, a fund manager in Tokyo at Norinchukin Zenkyoren Asset Management Co, which manages about US$10 billion in assets. "The US economy is getting worse. Simply put, it's in a recession."
The MSCI Asia Pacific Index lost 1.1 percent to 149.91 in Tokyo, on course for its largest drop since April 18. Financial shares were the biggest drag among the benchmark's 10 industry groups.
Japan's Nikkei 225 Stock Average slumped 1.1 percent to 13,943.26. Sumitomo Realty & Development Co retreated after Daiwa Institute of Research cut its rating on some developers. In Hong Kong, Kerry Properties Ltd fell the most since March 20 on speculation that further gains for property stocks may be limited.
US stocks tumbled yesterday with the Standard & Poor's 500 Index losing 1.8 percent, the biggest drop since April 11. Merrill Lynch & Co and Lehman Brothers Holdings Inc slumped after the Securities and Exchange Commission said the disclosure of capital and liquidity levels will be required this year.
"The fact that it has been taken negatively seems to suggest there are some skeletons in the closet," said Winston Sammut, managing director of Maxim Asset Management Ltd in Sydney. "This is a negative in a global sense because of the contagion that could follow on from that."
S&P 500 futures expiring in June rose 0.2 percent recently. Before yesterday, the MSCI index had risen 15 percent from a two-month low set on March 17 after JPMorgan Chase & Co rescued Bear Stearns Cos and the Federal Reserve cut interest rates to shore up confidence in the financial system.