Profit concerns send Europe, Asia stocks down

By Adria Cimino  |   2008-11-20  |     NEWSPAPER EDITION

STOCKS fell in Europe and Asia yesterday, led by chemical companies and financial firms, on concern the economic slowdown will cut profits.

United States futures dropped as a report showed consumer prices slid the most on record, heightening the risk of deflation, according to Bloomberg News.

BASF SE, the world's largest chemical company, tumbled 18 percent after abandoning its target to match last year's profit.

UBS AG slumped 3.8 percent as Morgan Stanley slashed its estimate for the Swiss bank's earnings by 23 percent, citing the possibility of more writedowns.

Sumitomo Mitsui Financial Group Inc, Japan's third-largest bank, tumbled 7.9 percent on plans to raise capital.

The MSCI World Index lost 0.8 percent to 855.05 at 1:31pm in London, extending this year's drop to 46 percent.

More than US$31 trillion has been erased from the value of global equities as the financial market turmoil pushes countries from Europe and the United Kingdom to the US and Japan into recession.

"We're in an uncertain environment," said Julien Quistrebert, an equity analyst at KBL Richelieu Gestion in Paris. "The question is how long will the recession last and what will be the impact on companies."

Europe's Dow Jones Stoxx 600 Index fell 2.2 percent. Rio Tinto Group, the world's third-biggest mining company, slipped 3.8 percent.

The MSCI Asia Pacific Index sank 0.9 percent, while Standard & Poor's 500 Index futures lost 1.8 percent.

Analysts have cut profit estimates for 48 percent of stocks they cover worldwide, the most in at least 15 years, and more downgrades are likely as the economy slows, JPMorgan Chase & Co said.