Asian stocks tumble amidglobal sellout

By Chua Kong Ho  |   2008-6-25  |     NEWSPAPER EDITION

ASIAN financial stocks fell after Goldman, Sachs & Co advised selling banks as credit losses widen and Lehman Brothers Holdings Inc said the parent of Japan's largest consumer-finance company may be insolvent.

Australia & New Zealand Banking Group Ltd dropped to the lowest in almost four years, while Aiful Corp slumped in Tokyo after an analyst at Lehman said the company's parent may have "funding issues," Bloomberg News reported.

"We're seeing global selling of financials," said Michael Birch, who helps manage the equivalent of US$140 million at Wallace Funds Management in Sydney. "Downgrades to mortgage insurers' ratings in the last few days, coupled with persistent requirements for capital, have led to further pressure."

The MSCI Asia Pacific Index dropped 0.2 percent to 138.35 in Tokyo, extending a three-day, 4 percent decline. Financial companies have led the sell-off among the benchmark's 10 groups in the past month on speculation credit-related losses will mount and after Moody's Investors Service stripped bond insurers MBIA Inc and Ambac Financial Corp of their Aaa ratings.

Japan's Nikkei 225 Stock Average lost 0.1 percent to 13,849.56. Toyota Motor Corp, the world's second-largest auto maker, declined after saying it may cut its 2008 sales forecast as demand in the US slumps.

Most other benchmark indexes in Asia retreated. Pakistan's main equity index surged the most in more than six years after the exchange cut the daily limit for a stock to fall to 1 percent from 5 percent and banned short-selling.