Asian Stocks Fall After Oil Rises to Record, Fed Cuts Forecast

Asian stocks slumped, led by Honda Motor Co., after a decline in the dollar pushed the price of crude oil to almost $100 a barrel and the Federal Reserve cut its forecast for U.S. economic growth.

Honda posted its biggest drop in three months, and Toyota Motor Corp., ranked second in U.S. auto sales this year, fell the most in more than a week as the yen strengthened to a two-year high against the dollar. Commonwealth Bank of Australia and Mizuho Financial Group Inc. slid after Freddie Mac, the second- biggest U.S. mortgage-finance company, reported a record loss.

``A spate of bad news related to the U.S. subprime-loan issue has made the outlook uncertain,'' said Kazuyuki Terao, who helps oversee $1.7 billion at RCM Japan Ltd. in Tokyo. ``With the chances of a U.S. economic slowdown on the rise, there are concerns that high commodity prices could squeeze corporate profits.''

The MSCI Asia Pacific Index lost 1.8 percent to 155.21 at 3:02 p.m. in Tokyo, with all 10 industry groups falling. Japan's Nikkei 225 Stock Average slid 2.5 percent to 14,837.66, its lowest close since July 2006, and South Korea's Kospi index lost 3.5 percent in its longest losing streak since December 2006. All Asian markets fell except New Zealand.

Air China Ltd., the world's largest carrier by market value, led airlines lower on concern the rising price of oil will increase fuel charges. Nippon Steel Corp. and JFE Holdings Inc., the world's second- and third-largest steelmakers, both sank to the lowest in at least 11 months. BHP Billiton Ltd., Australia's biggest oil producer, advanced.
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