Asian Stocks Drop as Recession Concerns Mount; BHP, Canon Fall

March 3 (Bloomberg) -- Asian stocks slumped for a second day, led by banks and mining companies, as another bailout for American International Group Inc. and a U.S. manufacturing report worsened confidence in the global economy.

Mitsubishi UFJ Financial Group Inc. dropped 1.4 percent as the U.S. government offered more aid to insurer AIG after the company reported the worst loss by any U.S. corporation. Canon Inc., which gets a third of its sales from the Americas, declined 4.1 percent after U.S. manufacturing shrank for a 13th month. BHP Billiton Ltd., the world’s biggest mining company, sank 1.8 percent in Sydney as oil and metals prices fell.

“Markets are reflecting the deepening of the financial crisis and a sense any recovery will be delayed,” Mamoru Shimode, an equity strategist at Resona Trust & Banking Co., said in an interview with Bloomberg Television.

The MSCI Asia Pacific Index dropped 1.2 percent to 71.63, set for its lowest close since August 2003, at 10:20 a.m. in Tokyo. The gauge has fallen 20 percent in 2009, extending last year’s record 43 percent tumble, as recessions in the world’s largest economies hurt earnings at companies from BHP to Toyota Motor Corp., the world’s largest automaker.

Japan’s Nikkei 225 Stock Average dropped 1.5 percent to 7,174.51 in Tokyo, while South Korea’s Kospi index slipped 2 percent. Australia’s S&P/ASX 200 Index fell 1.3 percent. All markets open for trading declined.

Futures on the Standard & Poor’s 500 Index added 0.4 percent. The gauge slumped 4.7 percent yesterday to its lowest close since October 1996. Europe’s Dow Jones Stoxx 600 Index slid 5 percent to the lowest close in six years after HSBC Holdings Plc, the region’s biggest bank by value, said it plans to raise $17.7 billion and shed 6,100 jobs.

Record Loss

The deepening global recession, a third government rescue for Citigroup Inc. and dividend cuts at companies from General Electric Co. to JPMorgan Chase & Co. have dragged the MSCI World Index to three consecutive weeks of declines. The benchmark gauge has fallen 23 percent this year, adding to last year’s 42 percent slump.

AIG yesterday said its fourth-quarter loss widened to $61.7 billion from $5.29 billion a year earlier. The results brought AIG’s annual loss to almost $100 billion, prompting the U.S. to offer a package of equity, new credit and lower interest rates on existing loans.

Mitsubishi UFJ, Japan’s largest bank, lost 1.4 percent to 417 yen in Tokyo. Mizuho Financial Group Inc., the country’s second largest, declined 1.7 percent to 178 yen.

Canon fell 4.1 percent to 2,315 yen in Tokyo, while Sony Corp., the world’s second-largest consumer-electronics maker, dropped 1.1 percent to 1,642 yen.

Oil, Metals

The U.S.’s Institute for Supply Management yesterday said its factory index stayed at 35.8 last month, below the 50 threshold that divides expansion and contraction. The gauge has remained below 50 since February 2008.

BHP Billiton fell 1.8 percent to A$27.45. Rio Tinto Group, the world’s third-largest miner, lost 1.2 percent to A$43.68. Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, slipped 1 percent to A$33.92.

Crude oil for April delivery tumbled 10 percent, the most since Jan. 7, to $40.15 a barrel in New York. A measure of six primary metals traded in London fell 2.2 percent, with nickel losing 4.5 percent.