Dec. 15 -- Asian stocks fell this week, dragging a key stock index to its biggest decline in four months as a U.S. interest-rate cut failed to ease concern that the world's largest economy will slide into a recession.
Mitsubishi UFJ Financial Group Inc., Japan's biggest bank by market value, and Samsung Electronics Co., South Korea's largest exporter, led the decline after the Federal Reserve said the U.S. economy is slowing. BHP Billiton Ltd., the world's largest mining company, dropped after metal prices fell.
``Market sentiment has been shaken,'' said Yang Haeman, who manages the equivalent of almost $1 billion at NH-CA Asset Management in Seoul. ``A U.S. slowdown is already quite certain and investors now are also worried that this will result in a global slowdown.''
The MSCI Asia Pacific Index this week declined 4.7 percent to 156.78. The drop was the most since the week ended Aug. 17. Concern that losses tied to the U.S. subprime market will derail global growth prompted the index to fall 5.5 percent in November, the biggest monthly slide since May 2006.
Japan's Nikkei 225 Stock Average fell 2.8 percent to 15,514.51. Benchmarks around the region declined this week, except in India and Pakistan.
A plan by central banks including the Fed to provide financial institutions with cash support raised concern credit- market conditions are worsening, prompting further declines in Asian shares. This week, Lehman Brothers Holdings Inc. said some precautions against mortgage losses were ineffective. Wachovia Corp. and Bank of America Corp. said credit-losses will widen.
Cash Support
Mitsubishi UFJ lost 11 percent to close at 1,074 yen this week in Tokyo. Mizuho Financial Group Inc., Japan's third- largest bank by market value, declined 12 percent to 561,000 yen, having fallen for four straight days. China Construction Bank Corp., the nation's largest mortgage lender, declined 9.5 percent to HK$6.80 in Hong Kong.
The Fed on Dec. 11 lowered its benchmark interest rate by a quarter-point to 4.25 percent and said ``economic growth is slowing.'' Before the cut, futures trading showed a 36 percent chance of a half-point reduction.
Samsung fell 4.4 percent to 581,000 won this week as a slowdown in the global economy may undermine demand for Asian goods. Hon Hai Precision Industry Co., the world's largest contract electronics manufacturer, slid 13 percent to NT$177, the lowest since March 9. The two were the biggest drags on technology stocks this week.
``The six-month outlook for equities is negative,'' said Heo Pil Seok, who oversees the equivalent of $4.4 billion at Midas International Asset Management in Seoul. ``There's a threat of a global economic slowdown. We could experience a flight to quality until the subprime issue is resolved.''
Lower Metals Demand?
Canon Inc., the biggest seller of digital cameras globally, fell 6.1 percent in the week to 5,510 yen. Toyota Motor Corp, the second most-selling car brand in U.S., declined 3.9 percent to 6,090 yen.
BHP declined 3.50 percent to A$42.05. Rio Tinto Group, the world's third-largest mining company, fell 5.7 percent to A$137.24. Jiangxi Copper Co., China's largest publicly traded producer of the metal, slid 9.2 percent to HK$19.02 in Hong Kong.
A measure of six metals on the London Metal Exchange, which includes copper and nickel, slid 4.1 percent this week. The index has fallen about 10 percent in the past three months amid concern a slowing U.S. economy will dent metals demand. Copper futures in New York slid 5.1 percent in the week.
``As we go into a global slowdown, commodities have lost a bit of traction,'' said Shane Oliver, who helps manage the equivalent of $113 billion at AMP Capital Investors in Sydney. ``Commodity prices may be soggy to weak over the next few months.''
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