Tokyo: Asian stocks slumped to a three-month low, led by Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., after the banks reported losses on investments related to US subprime loans.
Mitsubishi UFJ, Japan’s largest bank, slumped 5.3% to 1.08 million yen (Rs37,800), a two-year low. Sumitomo Mitsui, the third biggest, lost 5.9% to 920,000 yen, its lowest since September 2005.
Toyota Motor Corp. and Westfield Group, which has 59 shopping malls in the US, dropped after Wal-Mart Stores Inc. cut its profit forecast, adding to evidence consumer spending is cooling in the world’s biggest economy.
“The bearish camp that looks at this as a trigger for a real?economic?downturn seems to be growing,” said Thue Isen, who manages about $1 billion (Rs4,070 crore) in Asian equities at BankInvest Group in Singapore. “Risk has been re-packaged and traded between banks over the past few years and that makes it difficult for investors to have a good view on who has exposure.”
The Morgan Stanley Capital International (MSCI) Asia-Pacific Index lost 2.3% to 145.83 at 5:51pm in Tokyo. The MSCI Asia-Pacific Financials Index slumped 3.3%, the biggest decline among the measure’s 10 industry groups.
Japan’s Nikkei 225 Stock Average slid 2.2%. Matsushita Electric Industrial Co. slumped to a 22-month low.
Australia’s S&P/ASX 200 Index slid 3% to a five-month low after a report showed consumer confidence tumbled the most in nine months.
Indonesia’s Jakarta Composite index slumped 6.8%, the most in over three years, as investors cut holdings of riskier assets such as emerging-market stocks.
Stock markets were closed in India and South Korea.
In the US, Standard & Poor’s 500 futures dropped 0.6%. In Europe, the Dow Jones Stoxx 600 Index fell 1.2%.
Sumitomo Mitsui said it recorded “several billion yen” of losses in the three months to 30 June, after selling 350 billion yen in US mortgage-backed securities, including some backed by subprime loans.
Kazue Somiya in Tokyo and Emma O’Brien in Wellington contributed to this story.