Dec. 5 -- Asian stocks fell for a second day, led by banks and commodities companies, after JPMorgan Chase & Co. said subprime losses will require larger writedowns at brokerages and oil dropped to a six-week low.
Mizuho Financial Group Inc., Japan's second-biggest lender by market value, led banks lower after JPMorgan said deteriorating credit markets will reduce profits at the four biggest U.S. securities firms. BHP Billiton Ltd. and Inpex Holdings Inc. slid among commodity producers.
``Investors are anxious about more securities losses, so they're taking a wait-and-see approach now,'' said Koji Nakatsuka, a Tokyo-based fund manager at RCM Japan, a unit of Allianz Global Investors with $26 billion in assets. ``The outlook has become much gloomier for the U.S. than just six months ago.''
The MSCI Asia Pacific Index retreated 0.5 percent to 161.38 as of 11:33 a.m. in Tokyo, extending yesterday's 0.1 percent drop. Measures of finance and raw materials stocks contributed the most to the decline. Japan's Nikkei 225 Stock Average lost 0.4 percent. All markets open for trading fell except China, Taiwan and Malaysia. South Korea was little changed.
Nintendo Co. led a decline among Japanese exporters as a strengthening yen threatens to cut the value of overseas sales.
The MSCI Asia Pacific Index has dropped 6.4 percent from its Nov. 1 record amid speculation rising losses tied to investments in U.S. subprime mortgages will slow growth in the world's largest economy.
Stronger Yen
The U.S. Standard & Poor's 500 Index fell for a second day yesterday, paced by Goldman Sachs Group Inc. and Morgan Stanley.
Slumping credit markets will reduce the securities firms' earnings from debt underwriting and advising on mergers and acquisitions, JPMorgan analysts including Kenneth Worthington wrote in a report. The declining value of some debt securities held by the brokerages may force them to report further writedowns in the fourth quarter, Worthington wrote.
``Concerns about U.S. profits are now dominant in investors' minds and I suspect will continue to be the main factor weighing on stocks as we go into 2008,'' said Angus Gluskie, who helps manage the equivalent of $500 million at White Funds Management.
Mizuho dropped 1.8 percent to 592,000 yen. Sumitomo Mitsui Financial Group Inc., Japan's third-largest publicly traded bank, slid 3 percent to 893,000 yen. Both banks have forecast profit declines for the full year as defaults on U.S. subprime housing loans erode the value of mortgage-related investments.
Kookmin Bank, South Korea's largest lender, fell 2.8 percent to 63,000 won. Commonwealth Bank of Australia, the country's second-biggest lender, lost 1 percent to A$58.92.
Oil, Metals Slump
BHP Billiton, the world's largest mining company, lost 0.6 percent to A$42.83. Woodside Petroleum, Australia's second- biggest oil producer, declined 1.1 percent to A$47.18.
Mitsui & Co., Japan's second-largest trading company, which generates more than half of its profits from commodities dealing, slumped 3 percent to 2,275 yen. Inpex, Japan's biggest oil explorer, declined 1.8 percent to 1.1 million yen.
Crude oil for January delivery fell 1.1 percent to $88.32 a barrel in New York, the lowest close since Oct. 24. A measure of six metals traded on the London Metal Exchange, including copper and zinc, slid 1.5 percent yesterday.
Rio Tinto Group, the world's No. 3 mining company, advanced 0.5 percent to A$143.75 after London's Times newspaper said Baosteel Group Co. may be preparing to make a takeover bid for the company.
Nintendo, which UBS AG estimates loses 3 billion yen in profit from operations for every 1 yen gain against the dollar, slid 1.3 percent to 67,700 yen. Toyota Motor Corp., the world's largest automaker by value, dropped 1.1 percent to 6,060 yen.
Japan's currency strengthened to 109.87 versus the dollar, up from 110.22 at the close of trading in Tokyo yesterday. A stronger yen decreases the value of exporters' sales when converted into local currency.
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