By Patrick Rial and Shani Raja Nov. 18 (Bloomberg) -- Asian stocks fell for a second day, led by financial and technology companies, as HSBC Holdings Plc and Citigroup Inc. cut jobs and AU Optronics Corp. said it will reduce wages, spurring concern the global recession is worsening. HSBC dropped 1.6 percent after saying it has reduced 500 jobs in Asia, while Citigroup said it will eliminate 52,000 in the next year, twice the target announced last month. A measure of financial stocks dropped 3.5 percent to trade near a five-year low. Au Optronics, Taiwan's biggest maker of liquid-crystal displays, lost 6.6 percent. BHP Billiton Ltd. slumped 4 percent as Macquarie Group Ltd. cut its 2009 profit forecast by 31 percent and metal prices fell. ``We're seeing a rebasing of expectations to a much lower growth environment,'' said Prasad Patkar, who helps manage about A$1.3 billion at Platypus Asset Management in Sydney. ``Markets can adjust to recessions, but a complete meltdown scenario, however small, remains a probability.'' The MSCI Asia Pacific Index lost 2.4 percent to 80.81 as of 2:34 p.m. in Tokyo, extending yesterday's 0.4 percent drop. The measure is less than six points away from a five-year low reached at the close on Oct. 27. More than three stocks retreated for each that rose today, with financial stocks accounting for 40 percent of the slump. Shares on the gauge are valued at 10 times trailing earnings and fell to 8.2 times last month, the lowest level since at least 1995, Bloomberg data shows. The index has lost 49 percent this year as the collapse of the U.S. mortgage market sparked $960 billion in losses and writedowns at global financial companies and cost more than 166,000 jobs. Japanese Developers Japan's Nikkei 225 Stock Average slumped 2 percent to 8,354.24. Mitsubishi Estate Co. led property developers lower after a newspaper said the nation's condominium market will be weak in 2009. Woolworths Ltd. led declines in Australia before tomorrow's lifting of a ban on short selling of non-financial securities. Limiting losses, Macquarie Group Ltd. advanced 17 percent after profit beat analysts' estimates. Futures on the Standard & Poor's 500 Index slipped 0.3 percent. Yahoo! Inc. rose as much as 4.4 percent in after-hours trading after saying Jerry Yang will step down from his role as Chief Executive Officer. The S&P 500 slid 2.6 percent yesterday following a record contraction in New York manufacturing and Citigroup's plan to fire more employees. In Hong Kong, HSBC declined 1.6 percent to HK$80.65. Some 90 percent of the job cuts will fall in the city, the bank said. Two months ago, HSBC shed 1,100 workers in its global banking and markets division. Loan Target In India, ICICI Bank Ltd., the country's second largest, tumbled 5.8 percent to 363.90 rupees after halving its loan- growth target to 15 percent amid high borrowing costs and a weaker economy. The nation's growth may slow to 7.5 percent in the year ending March 31 after expanding more than 9 percent in the previous three years, according to the central bank. AU Optronics lost 5.3 percent to NT$18.05 after saying it will cut salaries of executives and directors. Taiwan Semiconductor Manufacturing Co., the world's biggest contract chip maker by sales, dropped 5.6 percent to NT$38.5. The company said it will hire fewer people than usual. Hon Hai Precision Industry Co., the world's largest contract electronics maker, tumbled 6.7 percent to NT$56.9 in Taipei after HSBC said the company's earnings have peaked and cut the shares to ``neutral'' from ``overweight.'' In Sydney, BHP, the world's largest mining company, lost 4 percent to A$24.20. Macquarie cut BHP's 2009 profit forecast by 31 percent and its 2010 prediction by 50 percent because of declines in commodity prices and lower production. Chinese Demand Iron ore contract prices may decline by 30 percent next year, twice as much as forecast, because of reduced estimates for growth in Chinese steel production, Goldman Sachs JBWere Pty said yesterday. A measure of six metals traded on the London Metal Exchange sank 3.3 percent yesterday. Queensland Ores Ltd. plunged a record 67 percent to 1.1 Australian cents after stopping production at a mine as metal prices fell and it failed to meet ore-grade targets. Mitsubishi Estate dropped 7.7 percent to 1,289 yen. Mitsui Fudosan Co., the largest Japanese developer, sank 5.4 percent to 1,309 yen. Nomura Real Estate Holdings Inc. lost 11 percent to 1,631 yen. The slump in the nation's condominium market will likely continue into 2009, the Nikkei newspaper reported today. A measure of real estate shares included in the Topix has lost 24 percent in the last six trading days and was headed for the lowest close since January 2004. Woolworths, Australia's biggest retailer, tumbled 5.9 percent to A$26.25. Telstra Corp., Australia's largest phone company, declined 3.6 percent to A$4.08. Short Selling Ban The ban on short selling of non-financial securities will be lifted from the opening of trade on Nov. 19, the Australian Securities and Investments Commission said this week. Prohibition of covered short sales in financial securities will continue. Macquarie, the nation's biggest securities firm, rallied 17 percent to A$24.19, the biggest gain on MSCI's Asian index. The company posted a 43 percent drop in profit to A$604 million ($392 million) for the six months to Sept. 30 as falling asset prices forced writedowns. That beat the average estimate of A$592.4 million from analysts surveyed by Bloomberg. To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

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