Asian Stocks Drop for Fourth Day, Led by Mitsubishi UFJ, Elpida

Oct. 27 (Bloomberg) — Asian stocks fell for a fourth day in volatile trade, led by banks and technology shares, as concern that a global economic slowdown is deepening outweighed government measures to stimulate growth.

Mitsubishi UFJ Financial Group Inc. slumped 11 percent after the Nikkei newspaper said the bank will have to raise funds to bolster capital. Their declines helped the Nikkei 225 Stock Average touch a 26-year low. Hyundai Department Store Co. plunged 15 percent in Seoul even after the Bank of Korea cut interest rates by an unprecedented 75 basis points. Elpida Memory Inc. tumbled 16 percent after Deutsche Bank AG advised investors to sell the stock.

“In this kind of market that’s moving without sensible reasons, only God knows what’s going to happen tomorrow,” said Yoshinori Nagano, a Tokyo-based senior strategist at Daiwa Asset Management Co., which manages the equivalent of $96 billion. “That’s why people are so scared of what’s ahead of them and sell whatever they have to avoid losses.”

The MSCI Asia Pacific Index declined 1.7 percent to 79.03 as of 11:10 a.m. in Tokyo, extending a three-day, 13 percent retreat. The Nikkei gained 0.6 percent to 7,691.30, after earlier falling to its lowest level since November 1982 and climbing as much as 3 percent. The measure

South Korea’s Kospi Index dropped 0.6 percent, after jumping as much as 3 percent following the rate cut. Taiwan’s Taiex Index tumbled 5.5 percent, led by Hon Hai Precision Industry Co. after regulators widened daily limits for stock declines.

New Zealand, Singapore and Malaysian markets are closed for holidays. Standard & Poor’s 500 Index futures rose 0.9 percent.

Government Measures

Japan’s government will compile a package of measures to support the country’s stock market, Finance Minister Shoichi Nakagawa said yesterday without being specific. Traders also increased bets that U.S. Federal Reserve policy makers, meeting this week, will cut its target for overnight loans between banks in half to 0.75 percent this week.

“Emergency meetings by policy makers around the world reflect their fear and the severity of financial turmoil,” said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. “They are on the right track and this excessive volatility in markets should calm soon.”

More than $11 trillion has been erased from the market value of equities so far this month, accounting for almost one-third of the total value wiped off stocks this year. MSCI’s index of developed and emerging stock markets plunged 47 percent in 2008, headed for its worst year on record, as credit-related losses topped $660 billion.

Mitsubishi UFJ fell 11 percent to 607 yen. Mizuho Financial Group Inc. declined 13 percent to 233,900 yen, the lowest since November 2003. Sumitomo Mitsui Financial Group Inc., Japan’s third-largest bank, slid 11 percent to 385,000 yen.

Fundraising Reports

Mitsubishi UFJ may raise as much as 1 trillion yen ($10.6 billion) by selling new shares to improve its finances, the Nikkei newspaper said yesterday. Mizuho Financial and Sumitomo Mitsui may also raise capital, broadcaster NHK reported. The three banks said in separate statements today that nothing has been decided.

Hyundai Department tumbled 15 percent to 46,300 won, extending a 15 percent decline on Oct. 24. KT&G Corp., South Korea’s biggest tobacco company, lost 6.6 percent to 72,200 won.

The Bank of Korea cut its seven-day repurchase rate by 75 basis points to 4.25 percent today at an emergency meeting of policy makers. The central bank also eased its rules on foreign- currency lending to allow exporters to borrow dollars to pay for their currency-related losses.

Hon Hai

Taiwan stocks fell after the island restored its daily stock trading limit to 7 percent starting today. The financial regulator halved the range to 3.5 percent from Oct. 13 to Oct. 24 to help stem a plunge in the stock market.

Hon Hai, the world’s largest contract electronics manufacturer, sank 6.9 percent to NT$70.4. Quanta Computer Inc., the world’s biggest notebook-computer maker, tumbled 7 percent to NT$29.35 in Taipei. Cathay Financial Holding Co., Taiwan’s largest financial-services company, dropped 6.9 percent to NT$30.20.

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