Asian Stocks due to Rising Oil Prices, Banks Decline (Bloomberg) (20-02-2008)

Feb. 20 (Bloomberg) -- Asian stocks fell sharply following the highest ever close in the price of oil, and as investor concern rises once again about subprime-related losses.

Mitsubishi UFJ Financial Group Inc. led banks lower after KKR Financial Holdings LLC deferred repayment on commercial paper debt and the Financial Times said Credit Agricole SA may announce further writedowns.

The MSCI Asia Pacific Index fell 2.9 percent to 141.89 at 4:02 p.m. in Tokyo, its biggest decline since Feb. 6. It has slumped 10 percent this year amid mounting losses related to investments in U.S. subprime, or higher-risk, mortgages. Japan's Nikkei 225 Stock Average sank 3.3 percent to 13,310.37.

Mitsubishi UFJ lost 4.4 percent to 919 yen, the biggest decline since Feb. 6. Sumitomo Mitsui Financial Group Inc., the No. 2 Japanese bank, tumbled 5.7 percent to 748,000 yen. In Australia, the Commonwealth Bank slumped 4.3 percent to A$43.33.

KKR Financial, the publicly traded affiliate of private equity group Kohlberg Kravis Roberts Co., said it extended the repayment deadline of its asset-backed commercial papers for the second time to March, according to a regulatory filing.

The Financial Times reported separately that Credit Agricole, France's biggest retail bank, may say it will write down another 650 million Euros ($956 million) to 900 million Euros when it announces 2007 results on March 5.

Among energy sensitive stocks automakers dropped on fears that more expensive fuel will curb sales and Hyundai Motor, South Korea's biggest carmaker, dropped 2.5 percent to 67,200 yen, its lowest level since Jan. 22. Toyota Motor Corp., Japan's largest automaker, slid 3.5 percent to 6,090 yen, the biggest slump since Jan. 28. Honda Motor Co., Japan's No. 2, fell 2.6 percent to 3,320 yen.

Crude oil rose 4.7 percent to settle at $100.01 a barrel in New York yesterday, a record closing price. Futures reached $100.10, the highest intraday price since trading began in 1983. Oil was recently at $99.30.

Korea Electric Power Corp., South Korea's biggest electricity generator, retreated 2.9 percent to 34,000 won. Tokyo Electric Power, Asia's biggest utility company, declined 1.6 percent to 2,725 yen. Kansai Electric Power Co., Japan's second-biggest power producer, dropped 2.6 percent to 2,600 yen.

Source: Bloomberg