* U.S. earnings shortfalls bode ill for Asia's corporates
* Dollar hits 20-month high vs euro; sterling at 5-year low
* Asia facing in inventory problem?
(Repeats to more subscribers)
By Kevin Plumberg
HONG KONG, Oct 22 (Reuters) - Asian stocks fell on
Wednesday as poor U.S. corporate results and slumping commodity
prices fanned worries of a protracted global economic slowdown.
The U.S. dollar rose to a 20-month high against the euro as
investors bet that central banks around the world will have to
catch up to this year's deep interest rate cuts by the Federal
Reserve as their economies slow.
U.S. crude oil futures fell more than $2 a barrel to below
$70 on worries that any output cuts by OPEC will not be enough
to offset weakening energy demand in leading consuming
countries.
In addition to problems created by tight credit markets,
some Asian companies have been caught off guard by the pace at
which global demand has dropped. As a result, rising
inventories pose yet another drag on earnings prospects.
"As the credit crunch has worsened, wholesale business
inventories have risen, causing an alarming rise in inventories
in Asia and emerging markets at a time when seasonally these
are usually being drawn down," said Sean Darby, chief Asia
strategist with Nomura in Hong Kong.
"We would expect earnings to be further revised down within
Asia and global emerging markets," he said in a note.
Japan's Nikkei share average <> fell 4.3 percent,
erasing Tuesday's gains, as the strengthening yen hurt
exporters' prospects.
Mitsubishi UFJ Financial Group's <8306.T> shares dropped
7.2 percent after the Nikkei business daily said Japan's top
lender will sharply cut its net profit estimate for the half
year ended Sept. 30, with the final figure expected to be half
that of a year earlier.
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> declined 3.8 percent.
Hong Kong's Hang Seng index <> dropped 2.8 percent,
with CITIC Pacific <0267.HK> one of the biggest decliners for a
second day after warning of nearly $2 billion in potential
losses resulting from unauthorised currency trading.
CITIC Pacific fell 10 percent in morning trade, after
losing half of its market value on Tuesday.
The Securities and Futures Commission (SFC) confirmed that
a formal investigation has been launched into the company.
Earnings estimates for Asia-Pacific companies excluding
Japan in 2009 have already fallen for four consecutive months,
according to Thomson Reuters data. In the last month to Oct.
16, forecasts fell 3.44 percent, the biggest monthly decline
since November 2001.
Companies in Hong Kong, Singapore and Taiwan were all
expected to post falling earnings this year, but were still
seen having double-digit growth in 2009, according to global
estimates tracker IBES.
The euro fell more than 1 percent to $1.2910 <EUR=>, a
fresh 20-month low, on trading platform EBS.
Sterling was down 1.7 percent at $1.6420 <GBP=D4> after
falling as low as $1.6390, its lowest since September 2003.
Bank of England Governor Mervyn King said on Tuesday that
Britain's economy is probably entering its first recession in
16 years. []
By 0405 GMT, NYMEX light crude oil futures <CLc1> fell
$2.42 to $69.76 a barrel, while London Brent futures
<LCOc1>lost $2.38 to $67.34.
(Editing by Kim Coghill)
