Asian stocks fell, dragging the regional benchmark index to a three-month low, as the deepening global recession raises bad-loan costs and hurts profits. Australia & New Zealand Banking Group Ltd., Australia’s fourth-biggest bank, dropped 2.1 percent after its Chief Executive said bad debts are spreading. Qantas Airways Ltd. slumped 3.4 percent in Sydney after Moody’s Investors Service cut its debt rating and as crude-oil prices climbed. Bridgestone Corp., the world’s biggest tiremaker, slumped 6.6 percent in Tokyo after saying profit will fall 71 percent this year. “The whole food chain is starting to feel the pain,” said Theo Maas, who helps manage about $3.2 billion at Fortis Investment Partners in Sydney. “Margins are coming down rapidly and there’s definitely worse to come. There is really no risk appetite for any investment at the moment.” The MSCI Asia Pacific Index dropped 2.3 percent to 75.98 as of 2:05 p.m. in Tokyo, set to close at the lowest since Nov. 20. The gauge lost 6.9 percent this week, taking its slump this year to 15 percent. The measure tumbled by a record 43 percent in 208, as the worsening credit crisis sent the world’s biggest economies into recession. The Nikkei 225 Stock Average fell 1.9 percent to 7,410.67, while Hong Kong’s Hang Seng Index dropped 2.5 percent. All benchmark indexes in the region declined except in China, Pakistan and Sri Lanka. Caltex Australia Ltd., the nation’s largest oil refiner, tumbled 8.8 percent after saying full-year profit plunged 95 percent. Samsung Electronics Co., the world’s largest memory- chip maker, lost 2.4 percent in Seoul as semiconductor-equipment orders in North America fell to their lowest level since 1991. Rising Defaults Futures on the Standard & Poor’s 500 Index dropped 0.7 percent. U.S. stocks declined yesterday, sending the Dow Jones Industrial Average to a six-year low, as Hewlett-Packard Co. cut its profit forecast and concern about rising credit-card defaults dragged financial shares to the lowest level since 1995. ANZ Banking fell 2.1 percent to A$12.34 as Chief Executive Officer Michael Smith said bad debts in Australia are spreading from “high-risk” businesses and customers to “mainstream” clients. National Australia Bank Ltd. slid 3.4 percent to A$17.77 after its rating was reduced to “hold” from “buy” at Goldman Sachs Group Inc. on the prospect of rising bad debts. Separately, National Australia said today that Ahmed Fahour, who headed the company’s Australian and Asian banking units, will leave the lender. “We’ll see more write-offs and bad debts as the recession deepens,” said Jason Teh, who helps manage $3.5 billion at Investors Mutual Ltd. in Sydney. “It’s still so uncertain when the cycle will turn.” Government Action In Tokyo, Mizuho Financial Group Inc., Japan’s second- largest bank, lost 4.6 percent to 187 yen. The Bank of Japan yesterday said it will buy corporate bonds from financial institutions and extend lending programs to prevent a shortage of credit. It was the latest in a series of government measures across the world to stem the worst global slowdown since World War II. Stock declines in the past year brought about by the deepening financial crisis wiped $27 trillion from the value of global equities. The average valuation of companies on MSCI’s Asian gauge has dropped 9 percent to 13 times reported profit in that time. Qantas, Australia’s largest carrier, slumped 3.4 percent to A$1.69 after Moody’s lowered its long-term debt rating to Baa2, the second-lowest investment grade, from Baa1 because of plunging air-travel demand. Slumping Orders Shares of airlines also fell on concern fuel costs will rise after oil prices surged 14 percent yesterday in New York. Cathay Pacific Airways Ltd. lost 1.3 percent in Hong Kong. Bridgestone sank 6.6 percent to 1,262 yen after saying net income will probably fall 71 percent to 3 billion yen ($32 million) this year as demand for new cars wanes. Caltex plunged 8.8 percent to A$8.76. The Sydney-based company said net income sank to A$34 million ($22 million) in the year ended Dec. 31 as production fell and lower crude-oil prices cut the value of stockpiles. Samsung dropped 2.4 percent to 469,000 won. Advantest Corp., the world’s biggest maker of memory-chip testers, lost 1.1 percent to 1,302 yen in Tokyo. Taiwan Semiconductor Manufacturing Co., the world’s largest maker of customized chips, slid 2.9 percent to NT$44.10. North American orders for semiconductor equipment dropped to $285.6 million last month from $1.14 billion in January 2008, the trade group Semiconductor Equipment & Materials International said. Orders dropped 51 percent from December.

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