May 11 (Bloomberg) -- Asian stocks declined the most in more than two weeks after metals prices fell and U.S. retailers reported slower sales.

Canon Inc., the world's No.1 digital-camera maker, and LG.Philips LCD Co., the second-largest manufacturer of liquid- crystal displays, led exporters lower on concern sales in the U.S. will falter as the economy slows. All 10 industry groups of the Morgan Stanley Capital International Asia-Pacific Index retreated as benchmarks in China, Australia, New Zealand and Indonesia fell from records.

``The U.S. economy remains the key to Asian exporters' profitability,'' said Barro Liao, who helps manage $2.7 billion at PCA Securities Investment Trust Co. in Taipei. ``Reports pointing to doubts over U.S. growth are not encouraging.''

BHP Billiton Ltd., the world's largest mining company, posted its biggest drop in two weeks as copper and zinc declined. Casio Computer Co. plunged after the company missed its annual profit target. Taiwan Semiconductor Manufacturing Co. dropped after saying sales in April slipped from a year earlier.

MSCI's Asia index lost 0.6 percent to 148.61 at 7:26 p.m. in Tokyo, the most since April 25, trimming its gains this week to 0.8 percent. Japan's Nikkei 225 Stock Average fell 1 percent to 17,553.72.

Hong Kong's Hang Seng Index slid 1.3 percent, the biggest drop in the region, as all benchmarks declined except in South Korea, India, Pakistan and the Philippines.

China's foreign-currency B shares rose to a record in Shanghai, capping the biggest weekly gain in more than six years, as local retail investors bet the stocks will be merged with the more expensive, yuan-denominated A shares.

Canon Slides

U.S. shares yesterday tumbled the most in almost two months, dragging the Standard & Poor's 500 Index lower by 1.4 percent from a six-year high.

Sales at U.S. retailers fell 2.4 percent last month, a record decline, the International Council of Shopping Centers said, as the coldest April in a decade curbed sales of clothing. A record 80 percent of U.S. retailers missed analysts' estimates in April, according to Retail Metrics Inc. The government will release its April retail sales report today.

Canon slid 1.9 percent to 6,910 yen, the biggest drop since April 19. North America accounted for 31 percent of Canon's total revenue last business year. Sony Corp., the world's No. 1 maker of game consoles, slid 1.7 percent to 6,450 yen. The U.S. was Sony's largest overseas market last year. LG.Philips lost 2.1 percent to 39,550 won.

Trigger for Drop

Meanwhile, gains in the cost of crude oil spurred a 1.3 percent increase in the import price index, the Labor Department said, exceeding the 1 percent rise expected by economists in a Bloomberg News survey. The trade deficit rose 10.4 percent to $63.9 billion in March, more than a $60 billion deficit estimated by economists surveyed by Bloomberg News.

``The weak U.S. economic data was the trigger for today's drop,'' said Seiichiro Iwamoto, who oversees $260 million at Fuji Investment Management Co. in Tokyo. ``Shares have been making big gains globally so the correction may last a while.''

HSBC Holdings Plc, Europe's largest bank by market value, lost 0.7 percent to HK$145 in Hong Kong. The U.S. accounted for more than two-thirds of the lender's total bad loans of $4.6 billion in the second half. Hon Hai Precision Industry Co., Taiwan's biggest electronics exporter by sales, fell 1 percent to NT$238.50. Venture Corp., Singapore's largest maker of electronics for companies such as Hewlett-Packard Co., slid 0.7 percent to S$15.30.

BHP, Jiangxi Copper

BHP Billiton lost 2.5 percent to A$31, its biggest loss since April 27. Jiangxi Copper Co., China's largest publicly traded producer of the metal, fell 2.8 percent to HK$11.30 in Hong Kong. Korea Zinc Co., the world's second-largest smelter of the metal, slipped 0.6 percent to 156,000 won.

A measure of six metals traded on the London Metal Exchange dropped 1.7 percent yesterday, its third straight decline. Copper fell 2 percent on signs demand may slow in China, the world's largest user of the metal used in pipes and wire. Zinc slid 2 percent.

``The outlook for commodities prices is far less certain than many investors believe, which is why we try to stay away from resources stocks especially,'' said Geoff Wilson, who helps manage $385 million at Wilson Asset Management in Sydney.

Rate Cut

Casio, the world's largest maker of digital watches, slid 16 percent to 2,025 yen, its biggest tumble since March 1975. The company said yesterday net income rose 5.9 percent to 25.1 billion yen ($209 million) for the year ended March 31. Profit missed the company's own target of 27.5 billion yen amid price declines for liquid-crystal displays.

Hisashi Moriyama, an analyst at JPMorgan Securities Japan Co., lowered his rating on the shares to ``neutral'' from ``overweight.'' He also cut the 12-month share-price target to 2,500 yen from 3,000 yen.

Earnings growth at Tokyo-based Casio will ``remain muted in the near term,'' Moriyama wrote in a report today.

Taiwan Semiconductor, the world's largest supplier of made- to-order chips, slipped 1.5 percent to NT$67.50. The company yesterday said sales in April fell 17.1 percent from a year earlier to NT$22.5 billion ($676.6 million).

Taiwan Semiconductor on April 26 reported a 42 percent slide in first-quarter net income on lower chip orders.

Macquarie Bank Ltd., Australia's largest investment bank, fell 1.4 percent to A$88.90. Its smaller rival Babcock & Brown Ltd. won backing from Alinta Ltd. for a A$7.9 billion ($6.5 billion) takeover that beat an offer from Macquarie.

Macquarie faces a second defeat in a week after being forced to abandon an A$11.1 billion buyout of Qantas Airways Ltd. Alinta, an energy transmission company, added 0.9 percent to A$15.39. Babcock and partner Singapore Power Ltd. bid A$16.06 a share for the Perth-based company. Babcock shares rose 0.1 percent to A$29.40.

China B Shares

Shanghai's index of foreign-currency B shares gained 3.9 percent to 289.21, taking the weekly advance to 25 percent. Shenzhen's measure, which slid today, surged 16 percent this week. Both gauges posted their best weekly performances since March 2001.

The B shares of Shanghai Lujiazui Finance & Trade Zone Development Co., a real-estate developer in Shanghai's financial district, climbed 2 percent to $2.34. The company's A shares dropped 3.2 percent to 26.95 yuan.

Alinta Ltd. (AAN AU)
Babcock & Brown Ltd. (BNB AU)
BHP Billiton Ltd. (BHP AU)
Canon Inc. (7751 JT)
Hon Hai Precision Industry Co. (2317 TT)
HSBC Holdings Plc (5 HK)
Jiangxi Copper Co. (358 HK)
Korea Zinc Co. (010130 KS)
LG.Philips LCD Co. (034220 KS)
Macquarie Bank Ltd. (MBL AU)
Shanghai Lujiazui Finance & Trade Zone Development Co.
(900932 CH)
Taiwan Semiconductor Manufacturing Co. (2330 TT)
Venture Corp. (VMS SP)

To contact the reporters for this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Darren Boey in Hong Kong at dboey@bloomberg.net

Last Updated: May 11, 2007 06:31 EDT