ASIAN stocks dropped yesterday, led by auto makers and technology companies, on concern surging oil prices and slowing United States growth will derail earnings.
Toyota Motor Corp, Japan's largest car maker, and Samsung Electronics Co, Asia's biggest maker of chips, mobile phones and flat panels, fell after US unemployment rose the most in 22 years.
Korean Air Lines Co plunged the most in three months after Goldman, Sachs & Co cut its share-price forecast and crude jumped by more than US$10 a barrel last Friday. India's Sensitive Index tumbled 3.1 percent, the most since April.
"We're being attacked from all fronts," said Jason Lee, who helps oversee the equivalent of US$2.1 billion as general manager of equities at Amanah Raya-JMF Asset Management in Kuala Lumpur. "We're heading for tough times; expect to see more earnings revisions."
The MSCI Asia Pacific Index lost 1.6 percent to 147.91 at 2:40pm in Tokyo, with about nine stocks retreating for each that climbed, said Bloomberg News. All 10 industry groups and every Asian market dropped, apart from Chinese mainland, Hong Kong, Australia and the Philippines, which closed yesterday for holidays.
Japan's Nikkei 225 Stock Average declined 2.1 percent to 14,181.38, after ending last week at the highest since January 9.
US stocks tumbled last Friday, sparking the Dow Jones Industrial Average's worst sell-off in 15 months, after the Labor Department said the jobless rate grew to 5.5 percent in May from 5 percent in April, the biggest increase since 1986. Standard & Poor's 500 Index futures expiring in June climbed 0.5 percent.
Toyota, which gets about half of its profit from North America, dropped 2.9 percent to 5,430 yen (US$51.49). Sony Corp, the world's second-largest maker of consumer electronics, fell 3.7 percent to 5,280 yen.
A loss of jobs is one of the criteria used by the National Bureau of Economic Research to determine when recessions begin and end. The US group defines contractions as a "significant" decrease in activity over a sustained period of time.
MSCI's Asian index has dropped 6.2 percent this year amid signs of slowing expansion in the US and US$389 billion of writedowns and credit losses. "If the US goes, Asia and the rest of the world will also go," said Schroders banker Leslie Phang.