Asian Stocks Decline for First Time in Five Days; Honda Drops

By Chen Shiyin

June 19 (Bloomberg) -- Asian stocks declined for the first time in five days, led by automakers and technology companies, on concern the decline in the dollar and slowing U.S. demand will hurt earnings.

Honda Motor Co., which gets about half of its sales from North America, dropped after brokerages said U.S. vehicle sales may plunge. Samsung Electronics Co., Asia's largest maker of chips and mobile phones, and Sony Corp. fell as the dollar's retreat against the won and the yen threatened to erode the value of U.S. sales. National Australia Bank Ltd. led financial stocks lower on speculation credit market losses will widen.

``There's a flight to safety because there's so much uncertainty in terms of earnings,'' said Leslie Phang, the Singapore-based head of investments at the private-clients unit of Schroders Plc, which oversees about $260 billion globally. ``We're certainly not seeing the last of the credit crunch.''

The MSCI Asia Pacific Index lost 1.6 percent to 142.07 as of 1:12 p.m. in Tokyo, halting a four-day, 3 percent rally. Almost nine stocks retreated for each that gained among the benchmark index's 991 members.

Japan's Nikkei 225 Stock Average dropped 1.9 percent to 14,181.05, its largest loss in a week. Most markets in Asia declined. China's CSI 300 Index resumed an eight-month decline, following a 5.2 percent climb yesterday.

U.S. stocks retreated yesterday, sending the Dow Jones Industrial Average to a three-month low, after FedEx Corp., the country's second-biggest package-shipment company, said it will post its first quarterly loss in 11 years and Fifth Third Bancorp cut its dividend.

Plunging Car Sales

MSCI's Asian index has dropped 9.3 percent this year amid signs of slowing expansion in the U.S. and almost $397 billion of writedowns and credit losses. A Merrill Lynch & Co. survey released yesterday showed investors are the most pessimistic in a decade as earnings and economic growth deteriorate.

Honda, Japan's second-largest car maker, lost 3.7 percent to 3,690 yen, poised for its biggest drop since May 9. Toyota Motor Corp., Japan's No. 1 automaker, declined 2.8 percent to 5,510 yen. Hyundai Motor Co., South Korea's biggest, retreated 2.1 percent to 79,500 won.

U.S. auto sales may fall in June to as low as 12.5 million, according to reports from Citigroup Inc. and Deutsche Bank AG. That would be the lowest since the 12-million rate in March 1993 and as much as 20 percent below June 2007 levels.

Samsung declined 3.4 percent to 680,000 won. Sony, the world's second-biggest consumer-electronics maker, slipped 2.4 percent to 5,230 yen. Canon Inc., the world's No. 1 digital- camera maker, dropped 1.4 percent to 5,480 yen.

Losses, Writedowns

The dollar declined on speculation of mounting credit-market losses and before a Federal Reserve report today that may show a manufacturing slump deepened. The U.S. currency has fallen 0.5 percent against the yen in the past three days and dropped for the third day in four against the won.

LG Display Co., the world's second-largest maker of liquid crystal displays, lost 2 percent to 40,300 won. Deutsche Bank AG cut its rating on the shares to ``hold'' from ``buy,'' citing an oversupply of LCDs and a weakening customer base.

National Australia Bank, the nation's biggest by assets, dropped 3 percent to A$26.76, on course for its lowest close since March 10. Mitsubishi UFJ Financial Group Inc., Japan's largest, lost 3.9 percent to 1,035 yen.

John Paulson, founder of the hedge fund company Paulson & Co., said yesterday banks are only a third of the way through credit-related writedowns. His comments coincided with Fifth Third Bancorp's announcement that it cut its dividend by two- thirds and most of its second-quarter profit will evaporate, sending shares of U.S. regional banks to their biggest drop ever.

Lend Lease, Sanyo

Lend Lease Corp., the developer of the Olympic Village that will house athletes during the 2012 games in London, slumped 3.7 percent to A$10.14 in Sydney, set for the lowest since May, 2004. The company is struggling to raise funding for the project, according to a report prepared for the city's Mayor Boris Johnson.

Sanyo Electric Co., the world's No. 1 maker of rechargeable batteries, jumped 3 percent to 279 yen. The company will double production of nickel-metal hydride rechargeable batteries this fiscal year ending March 31, spokeswoman Yuko Hosaka said, confirming a report by the Nikkei newspaper.

To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net.