June 23 (Bloomberg) -- Asian stocks slumped to the lowest in almost three months after a rebound in oil prices and renewed predictions of asset writedowns rekindled concern global economic growth will slow.
Bridgestone Corp., the world's largest tiremaker by sales, dropped for a third day. Samsung Fire & Marine Insurance Co. led financials lower as Citigroup Inc. prepared to cut jobs and UBS AG forecast the U.S. bank will write down more assets. Toyota Motor Corp. tumbled to the lowest in a month as the dollar weakened and the U.S. auto market showed further signs of deteriorating.
``People's fears about inflation are materializing as commodity prices rise,'' said Yang Jeung Won, chief investment officer in Seoul at Samsung Investment Trust Management Co., which oversees the equivalent of $7.8 billion in equities. ``Financials are going to teeter on shaky ground for a while to come.''
The MSCI Asia Pacific Index lost 0.5 percent to 139.37 as of 1:38 p.m. in Tokyo, headed for the lowest since April 1. Japan's Nikkei 225 Stock Average fell 0.4 percent to 13,882.45. Indexes declined throughout the region, except in Hong Kong, Vietnam, New Zealand and Sri Lanka.
More than $8 trillion in global stock market value has been wiped out this year as a 41 percent jump in oil raises costs for consumers and businesses. Higher commodities prices are also hampering central bank efforts to keep interest rates low as financial institutions' access to credit dries up. Shares in the Philippines dropped to a 20-month low after the central bank said it may have to tighten monetary policy to curb inflation.
Subprime Fallout
Valad Property Group led Australian shares lower after the company cut its earnings forecast amid the U.S. housing recession. Valad joins Mirvac Group and APN/UKA European Retail Property Group, who last week cut forecasts in the wake of the U.S. subprime rout.
More than $398 billion in asset writedowns and credit losses stem from the collapse of the U.S. subprime-mortgage market, according to data compiled by Bloomberg.
Oil rebounded from the lowest in a week, climbing 2 percent to $134.62 in New York on June 20 and recently traded at $136.42. The weakening dollar has spurred a flight to commodities and other assets that will retain their value in an inflationary environment.
Benchmarks in the U.S. and Europe fell to the lowest in three months on June 20, dragged down by the gain in oil and after analysts predicted banks will post more credit-market losses.
Samsung Fire & Marine, South Korea's biggest non-life insurer by market value, dropped 3.2 percent to 215,000 won. Mitsubishi UFJ Financial Group Inc., Japan's second-biggest bank, lost 1.3 percent to 992 yen. T&D Holdings Inc., the nation's largest publicly traded life insurer, dropped 6.6 percent to 6,550 yen, the steepest slide since March 13.
More Writedowns?
Citigroup may add another $8.7 billion in asset writedowns this quarter to the $42 billion it has already announced, according to UBS AG. Citigroup may also begin a round of previously announced job cuts this week, a person familiar with the situation said.
Elsewhere, Lehman Brothers Holdings Inc. predicted UBS and Deutsche Bank AG could produce a total of $8.5 billion in asset write-offs for the second quarter.
``The resurgence of risks related to the credit crunch is the most important factor in the market,'' Tomochika Kitaoka, a Tokyo- based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television.
Bridgestone, which loses almost $250 million in operating profit for every $10 gain in the price of oil according to Nikko Citigroup Ltd., declined 2.5 percent to 1,813 yen. Bridgestone expects net income to fall 32 percent this fiscal year on surging costs for petroleum-based materials and rubber.
China Petroleum & Chemical Corp. tumbled 6.4 percent to 12.01 yuan. China's largest refiner is hampered by higher oil prices as the government controls how much it can charge for fuel. Mitsui Chemicals Inc., Japan's largest chemical maker by sales, slumped 3.3 percent to 566 yen.
Tumbling Sales
Toyota, which generates over half its profit from the U.S., fell 1.9 percent to 5,310 yen. Denso Corp., Japan's largest auto- parts maker, slid 2.8 percent to 3,780 yen. Hyundai Motor Co., South Korea's largest automaker, fell 1.9 percent to 76,700 won.
Prices in the U.S. for used large pickups and sports utility vehicles tumbled at least 21 percent in May, according to Atlanta- based Manheim Consulting estimates, lowering the attractiveness of new vehicles as well.
Auto shares also slumped after Standard & Poor's said it may lower credit ratings on the three largest U.S. auto producers due to the effect higher fuel prices are having on the industry.
The dollar dropped to as low as 107.11 against the yen in trading today, a level not seen since June 11. The weaker dollar reduces the value of sales generated in the world's largest economy.
Robinsons Land Corp., the second-largest shopping mall developer in the Philippines, slumped 10 percent to 7.9 pesos, while Megaworld Corp., the No. 2 overall developer by sales, declined 4.3 percent to 1.34 pesos.
Inflation Fight
Philippine central bank governor Amando Tetangco said on June 21 the bank is prepared to take further action to tame inflation as consumer prices are rising at the fastest pace in nine years.
Valad, an Australian real estate investment trust, lost 4.8 percent to 79.5 cents. The company cut its earnings forecast for this quarter by 11 percent, citing ``challenging'' conditions created by the U.S. subprime crisis.
Perpetual Ltd., an Australian fund management company, posted the biggest decline among the MSCI Asian index's 990 members, plunging 11 percent to A$42.67. Its rating was downgraded to ``underweight'' from ``equal-weight'' by Morgan Stanley.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net. Kyung Bok Cho in Seoul at kcho7@bloomberg.net
Last Updated: June 23, 2008 01:12 EDT
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