Asian Stocks Fall on Growth, Profit Concerns; Sony, Rio Slump

May 14 (Bloomberg) -- Asian stocks fell, driving the MSCI Asia Pacific Index down the most in six weeks, as U.S. retail sales declined and Leighton Holdings Ltd. cut its profit target.

Sony Corp., the world’s No. 2 maker of consumer electronics, slumped 6.8 percent amid speculation it will today forecast a second-straight annual loss. Leighton Holdings Ltd., Australia’s biggest builder, fell 7.2 percent after slashing its full-year forecast by 10 percent. Rio Tinto Group, the world’s third- largest mining company, tumbled 11 percent in Sydney, falling for a second day after the Daily Telegraph reported the company may sell shares.

The MSCI Asia Pacific Index dropped 2.7 percent to 95.54 as of 1:44 p.m. in Tokyo, the biggest decline since March 30. Through yesterday, the measure had climbed 39 percent from a five-year low on March 9 on speculation the global economy is recovering, taking valuations of companies in the gauge to the highest levels since March 2004.

“Investors had started expecting a possible recovery even though it wasn’t clear if the global economy had bottomed out,” said Naoteru Teraoka, who helps oversee the equivalent of $23 billion at Chuo Mitsui Asset Management Co. in Tokyo. “That was premature.”

Japan’s Nikkei 225 Stock Average slumped 2.4 percent to 9,120.15. Hong Kong’s Hang Seng Index sank 3.2 percent, while Australia’s S&P/ASX 200 Index slid 2.8 percent. All markets fell.

Panasonic Corp., the world’s biggest consumer-electronics maker, lost 4.5 percent after the Yomiuri newspaper reported the company may forecast a net loss. Hong Kong Exchanges & Clearing Ltd., operator of Asia’s third-biggest stock market, fell 5.7 percent after its chairman said it was “difficult to say” if profit had hit bottom. Alumina Ltd. slumped 13 percent in Sydney on speculation China has boosted aluminum production.

Retail Sales

Futures on the Standard & Poor’s 500 Index lost 0.2 percent. The gauge fell 2.7 percent yesterday as the Commerce Department reported a 0.4 percent decline in retail sales in April. Economists had estimated the number would be unchanged.

Treasuries and the dollar rose as demand for safe-haven assets climbed ahead of a U.S. government report today that economists expect will show an increase in jobless claims. The yield on the 10-year note declined two basis points to 3.10 percent, according to data compiled by Bloomberg. The U.S. currency advanced to 95.74 yen from 95.30 yesterday in New York.

Sony retreated 6.8 percent to 2,400 yen. Canon Inc., which gets a third of its sales from the Americas, declined 4.2 percent to 3,170 yen.

“The U.S. retail report stole confidence from investors that the global economy was headed for a recovery,” said Mitsushige Akino, who oversees about $629 million at Ichiyoshi Investment Management Co. in Tokyo. “Current valuations are prohibitive unless you believe companies will raise annual forecasts later this year.”

Panasonic, Leighton

The two-month rally in stocks has pushed the average valuation of companies in the MSCI Asia Pacific Index to 31 times reported profit, the highest since March 30, 2004.

Panasonic lost 4.5 percent to 1,388 yen. The company may forecast a net loss of more than 100 billion yen for the business year through March 31, 2010, the Yomiuri newspaper reported. The electronics maker is scheduled to announce financial results tomorrow.

Leighton tumbled 7.2 percent to A$22.59 after forecasting full-year net profit of about A$430 million ($323 million). The company said on Feb. 12 that full-year profit may be about A$480 million.

Hong Kong Exchanges slumped 5.7 percent to HK$103.6. Chairman Ronald Arculli said it’s “difficult to say” if earnings hit bottom after the company yesterday reported its lowest quarterly profit in two years.

Mining Companies Fall

“Every day you hear good news, you hear not-so-good news,” Arculli said in an interview with Bloomberg Television yesterday. “Unfortunately, with the uncertainty, there’s bound to be volatility.”

Rio Tinto sank 11 percent to A$57.91, extending yesterday’s 4.7 percent drop. The Telegraph reported yesterday that the company may drop an investment deal with Aluminum Corp. of China for a 5 billion-pound ($7.6 billion) share sale.

Alumina, partner in the world’s biggest producer of the material used to make aluminum, slumped 13 percent to A$1.19.

China may produce as much as 12.6 million tons this year, Ru Xiaojie, an analyst at Aluminum Corp., said yesterday in Beijing at a conference. Ru said after her speech that the analysis represented her own views.

BHP Billiton Ltd., the world’s biggest mining company, sank 5.5 percent to A$32.55 as the U.S. retail sales report fanned concern falling consumer spending will curb demand for resources. Crude oil for June delivery lost 1.4 percent to $58.02 a barrel in New York, the steepest drop since April 27. Copper futures declined 2.6 percent.

Lower crude prices prompted Inpex Corp., Japan’s largest oil and gas explorer, to forecast a 61 percent tumble in net income this fiscal year, a filing with the exchange showed yesterday. The stock slumped 6.2 percent