Bloodbath in stocks continues in Asia

From Bloomberg:

The MSCI Asia Pacific Index tumbled 3.4 percent to 145.51 at 7:10 p.m. in Tokyo, its lowest close since Aug. 22. More than 10 stocks declined for every one that rose, with a measure of financial companies the biggest drag on the index.

Hong Kong's Hang Seng Index dropped the most since Sept. 11, 2001. Both the Hang Seng and Singapore's Straits Times Index have slumped more than 20 percent from their October peaks, a drop some traders consider as a bear market.

Japan's Nikkei 225 Stock Average slid 3.4 percent to 13,504.51, its lowest close since October 2005 and the worst start to a year since Bloomberg began tracking the data from Jan. 6, 1970.

The MSCI World Index has decreased 6.9 percent in 2008, wiping out $2.1 trillion from its members' market capitalization amid speculation the U.S. will fall into recession as losses related to mortgage defaults spread.

The Kospi index fell 2.4 percent in Seoul after South Korean department store sales declined for the first time in seven months. Australia's S&P/ASX 200 Index slipped for an eighth day in its longest sell-off in more than seven years, as consumer confidence dropped in January by the most in 14 months. All national benchmarks in Asia fell, except Vietnam's.

The economic reports from Japan today did not help.

Japan's machinery orders fell in November as companies pared spending in anticipation the U.S. slowdown will spread to Asia and hurt exports.

Orders declined 2.8 percent from October, when they rose 12.7 percent, the Cabinet Office said in Tokyo today...

Producer prices rose 2.6 percent in December from a year earlier, the fastest pace since September 2006...

Consumers last quarter became the most pessimistic about the economy since March 2003, a Bank of Japan survey showed today. Some 86 percent of respondents predicted prices will rise this year, the highest proportion since the central bank started asking people about inflation expectations in 1997...

The current account surplus widened 2.1 percent in November, the Finance Ministry said today, as exports to China and other emerging markets compensated for slowing U.S. demand.

And speaking of China, that country chose a "good" time to tighten policy further today.

China ordered banks to set aside larger reserves and imposed price curbs on grain, meat and eggs to try to prevent inflation at an 11-year high from triggering civil unrest.

Lenders must park 15 percent of deposits with the central bank from Jan. 25, the People's Bank of China said today on its Web site, up from 14.5 percent. The ratio is the highest in at least 20 years.