By Kyung Bok Cho and Ian Sayson Oct. 27 (Bloomberg) -- Asian stocks and U.S. futures plunged on concern economic stimulus measures will fail to stop a global slowdown that's forcing more countries to seek International Monetary Fund help and companies to slash profit forecasts. Hong Kong's Hang Seng Index plummeted as much as 15 percent, the most since the 1989 Tiananmen Square crackdown, as money market rates rebounded. Philippine stocks slumped 12 percent after Ukraine became the fifth nation to ask for IMF help. Japan's Nikkei 225 Stock Average fell to a 26-year low as Mitsui O.S.K. Lines Ltd. cut earnings predictions and the yen rose for a fifth day, reducing the value of the country's exports. The Bank of Korea lowered rates at an emergency meeting by a record today. ``This is a bloodbath,'' said Jonathan Ravelas, chief market strategist at Banco de Oro Unibank Inc., which has more than $6 billion in trust assets under management. ``The market continues to focus on the negative economic effects of the financial crisis instead of the actions taken by governments and central banks to restore confidence.'' The MSCI Asia Pacific Index fell 6.9 percent to 74.89 as of 4:49 p.m. in Tokyo. The gauge has lost 30 percent this month and now trades at 1 times book value, less than the S&P 500 at 1.7 times book value and the Dow Jones Stoxx 600 Index at 1.2 times. Standard & Poor's 500 Index futures sank 4.5 percent. Reports this week may show the U.S. economy shrank last quarter for the second time in a year as consumers and companies retrenched. Traders also increased bets that U.S. Federal Reserve policy makers will cut their target for overnight loans between banks in half to 0.75 percent this week. Hang Seng Hong Kong's Hang Seng tumbled 15 percent to 10,685, the biggest decline since June 1989, when the Chinese government used military force to clear demonstrators in Beijing. Aluminum Corp of China Ltd. led declines after profit slumped. Asian money-market rates rose. Hong Kong's three-month interbank lending rate, or Hibor, climbed 0.45 percentage point to 3.74 percent, the most since Sept. 18. It's ``understandable'' that the city's banks are tightening lending, Monetary Authority Chief Executive Joseph Yam said today. Japan's three-month rate for yen loans advanced to the highest since March 1998. The Nikkei 225 fell 6.4 percent to 7,162.90, its lowest level since October 1982, paced by Honda Motor Co. and Canon Inc. The yen rose as investors shrugged off a Group of Seven warning about ``excessive'' currency gains that are hurting exporters, while Mitsubishi UFJ Financial Group Inc. plummeted after the Nikkei newspaper said the bank will need to raise funds. ``In this kind of market that's moving without sensible reasons, only God knows what's going to happen tomorrow,'' said Yoshinori Nagano, a Tokyo-based senior strategist at Daiwa Asset Management Co., which manages the equivalent of $96 billion. ``That's why people are so scared.'' IMF Help The International Monetary Fund said yesterday it will lend Ukraine $16.5 billion and give Hungary ``a substantial financing package.'' The bank has agreed to lend Iceland $2 billion, while Belarus and Pakistan may also get emergency loans. Concern that the credit market turmoil has spread to Asian emerging markets drove the Philippine benchmark index down 12 percent, the biggest decline since 1987 and triggering a 15 minute trading halt. New Zealand, Singapore and Malaysia are shut for holidays. South Korea's Kospi Index was the only Asian stock market to gain, adding 0.8 percent in the last minutes of trading. The central bank slashed interest rates by a record 75 basis points at an emergency meeting to bolster markets as the nation faces its biggest crisis since requiring an IMF bailout 10 years ago. The rate cut ``won't make much difference right now,'' Steve Hanke, professor of applied economics at Johns Hopkins University, said in a Bloomberg Television interview. ``They're really in the middle of a complete panic and probably part of the panic has been created internally by making a kind of ad hoc policy. They don't seem to really have a coherent game plan.'' Value Wiped Out More than $11 trillion has been erased from the market value of equities so far this month, accounting for almost one-third of the total value wiped off stocks this year. MSCI's index of developed and emerging stock markets plunged 47 percent in 2008, headed for its worst year on record, as credit-related losses topped $660 billion. In Hong Kong, Industrial & Commercial Bank of China Ltd., the world's largest by market value, slid 11 percent to HK$2.79, a record low. The company said on Oct. 24 that third-quarter profit rose 26 percent, the smallest gain since the bank went public two years ago. Aluminum Corp of China Ltd., known as Chalco, retreated 20 percent to HK$1.98. The company said yesterday that quarterly profit slumped 93 percent as slowing growth damped demand. Citic Pacific Ltd., which holds a stake in Cathay Pacific Airways Ltd., slipped 24 percent to HK$3.84 in Hong Kong, on course for a record low. About 40 of the company's investors are seeking compensation for stock losses resulting from the company's failed bets on the Australian dollar, the South China Morning Post reported. Kawasaki Kisen Kaisha Ltd., Japan's third-largest shipping line, lost 6.9 percent to 322 yen, while Mitsui O.S.K., operator of the nation's largest fleet of iron-ore ships, slid 6.9 percent to 379 yen. The companies cut their full-year profit forecasts as shipping rates drop. Banks Decline Mitsubishi UFJ fell 15 percent to 583 yen and Mizuho Financial Group Inc. lost 15 percent to 230,000 yen. Both stocks dropped by the most on record. Sumitomo Mitsui Financial Group Inc., Japan's third-largest bank, slid 11 percent to 385,000 yen. Mitsubishi UFJ may raise as much as 1 trillion yen ($10.6 billion) by selling new shares to improve its finances, the Nikkei newspaper said yesterday. Mizuho Financial and Sumitomo Mitsui may also raise capital, broadcaster NHK reported. The three banks said in separate statements today that nothing has been decided. Taiwan's Taiex Index tumbled 4.7 percent, led by Hon Hai Precision Industry Co. after regulators widened daily stock trading limits to 7 percent from 3.5 percent. Hon Hai, the world's largest contract electronics manufacturer, sank 6.9 percent to NT$70.40 in Taipei. Cathay Financial Holding Co., Taiwan's largest financial-services company, dropped 6.9 percent to NT$30.20. Philippines, Indonesia In the Philippines, Banco de Oro Unibank Inc., the second- largest bank, lost a record 24 percent to 22.50 pesos after its nine-month profit fell. The peso fell 0.7 percent to 49.34, bringing this year's loss to 15 percent. Indonesia's Jakarta Composite index sank 6.9 percent, while the rupiah tumbled as much as 5.1 percent against the dollar, the biggest loss since April 2001. PT Telekomunikasi Indonesia, the nation's biggest telephone company, fell 9.3 percent to 5,350 rupiah on concern the cost of foreign debt repayments will increase as the currency declines. Medco Energi, Indonesia's largest listed oil company, plunged 9.2 percent to 1,975 rupiah. Crude oil dropped 5.4 percent to $64.15 a barrel in New York on Oct. 24. To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net; Ian C. Sayson in Manila at isayson@bloomberg.net

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