By Chen Shiyin
Jan. 28 (Bloomberg) -- Asian stocks fell, with the region's benchmark set for its biggest monthly decline since September 2001, on concern the world's two largest economies are slowing.
Mitsubishi UFJ Financial Group Inc. led Japanese banks lower after Goldman, Sachs & Co. said the nation is probably in a recession. Komatsu Ltd., Japan's largest maker of construction machinery, slid after CLSA Ltd. cut its rating. Datang International Power Generation Co. plunged after China's worst snowstorms in decades disrupted travel and cut energy supplies.
``The U.S. is either also close to a recession or already in it,'' Hans Goetti, chief investment officer of LGT Bank in Liechtenstein AG, which manages $10 billion, said in an interview with Bloomberg Television. ``Uncertainty is high and we have a strategy of selling into strength in the next few months.''
The MSCI Asia Pacific Index dropped 3 percent to 141.57 as of 2:40 p.m. in Tokyo, snapping a three-day, 10 percent rally. The benchmark has lost 10 percent so far this year and volatility today jumped to 61, the highest since October 1998, according to Bloomberg data. About nine stocks retreated for each that rose.
The CSI 300 Index slumped 6.2 percent in China, the least favored market by the region's funds, according to Citigroup Inc. Japan's Nikkei 225 Stock Average lost 3 percent to 13,215.80. Benchmarks in other markets open for trading retreated. Australia is closed for a holiday.
Hong Kong's Hang Seng Index tumbled 4.7 percent. Yue Yuen Industrial (Holdings) Ltd., the world's largest maker of sports shoes for brands such as Nike Inc., slumped to a three-month low.
Banks Decline
Mitsubishi UFJ, Japan's largest publicly traded bank, slid 5.1 percent to 987 yen. Sumitomo Mitsui Financial Group Inc., the second-biggest, dropped 5 percent to 802,000 yen.
Japan's economy probably entered a recession amid ``a slump in domestic demand,'' Tetsufumi Yamakawa, Goldman Sachs chief Japan economist, said in a report today.
A U.S. government report due on Jan. 30 is expected to show growth slowed to a 1.2 percent annual rate from October to December, a quarter of the previous three months' pace, according to the median estimate of economists in a Bloomberg News survey.
Kookmin Bank, South Korea's largest, fell 2.4 percent to 60,900 won. HSBC Holdings Plc, Europe's No. 1 bank by market value, slipped 2.8 percent to HK$117.10 in Hong Kong.
``The outlook for shares is still in doubt as there are a number of fronts that could potentially deteriorate,'' said Masatoshi Sato, a strategist at Mizuho Investors Securities Co. in Tokyo. ``Bank earnings may show more losses, but the end still isn't in sight.''
Ratings Cut
Komatsu dropped 6.5 percent to 2,455 yen. The shares were cut to ``underperform'' from ``buy'' by Takeaki Ueno, an analyst at CLSA.
Hitachi Construction Machinery Co. plunged 12 percent to 2,670 yen. CLSA also lowered its recommendation on shares of the world's biggest maker of giant excavators to ``underperform'' from ``outperform,'' while Nomura Securities Co. cut its rating to ``neutral'' from ``buy.''
Datang Power plunged 9.4 percent to 17.51 yuan, poised for its lowest close since Dec. 25. China shut 5 percent of the country's coal-fired power plants after snowstorms delayed fuel deliveries, making it ``difficult'' to stabilize energy supplies, the National Development and Reform Commission said today. The problem may persist in some regions throughout the year, the country's top planning agency said.
In South Korea, Daewoo Engineering & Construction Co. slipped 3.5 percent to 18,200 won after Korea Investment & Securities Co. cut its six-month price estimate for the nation's largest builder by 24 percent.
To contact the reporter on this story: Chen Shiyin in Singapore at schen37@bloomberg.net ;
Source : Bloomberg
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