Feb. 14 (Bloomberg) -- Asian stocks fell for the first week in three amid a deteriorating outlook for corporate profits and doubts over whether U.S. stimulus measures will succeed in alleviating the financial crisis.

Nomura Holdings Inc., Japan’s biggest brokerage, fell 17 percent in the week on share-sale plans and as U.S. Treasury Secretary Timothy Geithner said he needed time to work out details of a bank-rescue plan unveiled on Feb. 10. Sony Corp., which makes a quarter of its sales in the U.S., lost 7.8 percent in Tokyo. Electronics maker Pioneer Corp. dropped 13 percent in Tokyo after it widened its full-year loss forecast.

“Investors are disappointed with the lack of clarity on the U.S. bank-rescue plan,” said Daphne Roth, Singapore-based head of Asia equity research at ABN Amro Private Bank, which manages about $27 billion of Asian assets. “We will see more earnings downgrades going into the next few months and that’s going to drag down Asian stocks at least till the end of the first half.”

The MSCI Asia Pacific Index slipped 2.0 percent to 81.75 in the past five days, following a 3.9 percent increase in the previous two weeks. The gauge is down 8.7 percent in 2009 amid mounting signs the global recession is hurting corporate profits. The Nikkei 225 Stock Average declined 1 percent this week, while Hong Kong’s Hang Seng index dropped 2.8 percent. China’s Shanghai Composite Index lost 9.6 percent.

Orix Corp. Japan’s biggest non-bank financial company, slipped 26 percent after cutting its profit forecast. Haseko Corp., a Japanese general contractor, dived 22 percent after cancelling its dividend. Rio Tinto Group, the world’s third- biggest mining company, surged 9.1 percent as Aluminum Corp. of China agreed to invest $19.5 billion in the debt-laden company.

Raising Capital

Asian stocks have fallen this year amid mounting signs the financial crisis, which has precipitated more than $1 trillion in credit-related losses, is hurting corporate earnings.

Nomura fell 17 percent to 474 yen. The company said on Nov. 9 that it may sell as much as 300 billion yen ($3.3 billion) of common stock to replenish capital eroded by tumbling stocks markets, which contributed to four straight quarterly losses. Mizuho Financial Group Inc., Japan’s second-largest bank, fell 7.5 percent to 209 yen.

Shares also fell as Geithner announced a financial rescue that included as much as $2 trillion in funding for programs aimed at spurring new lending and addressing banks’ illiquid assets. The U.S. government was going to proceed “carefully” on the proposal, Geithner told Congress on Feb. 11.

Government Action

Governments around the world are stepping up efforts to ease the crisis that the International Monetary Fund predicts will cause global growth to almost grind to a halt this year. Australia yesterday passed a A$42 billion ($28 billion) stimulus package aimed at averting the nation’s first recession in 18 years.

Sony, the world’s second-largest maker of consumer electronics, lost 7.8 percent to 1,722 yen on concern the global recession will curb overseas shipments. Samsung Electronics Co., the world’s biggest computer-memory maker, slumped 6.2 percent to 511,000 won.

Pioneer tumbled 13 percent to 142 yen. The company said Feb. 12 that it will exit the money-losing television business and projected its net loss will reach 130 billion yen in the year ending March 31, exceeding the 78 billion yen deficit estimated in October.

Orix plunged 26 percent to 2,775 yen after cutting its full-year profit forecast by 86 percent because of the falling value of stockholdings and a drop in property revenue.

‘Not Over Yet’

Haseko dropped 22 percent to 61 yen after canceling its planned dividend this fiscal year and reversing its forecast for the year ending March 31 to a net loss of 6 billion yen ($66 million), from a 16.5 billion yen profit.

“The worst is not over yet,” said John Koh, regional investment director at MEAG Hong Kong Ltd. which manages $1.1 billion. “We’ll see worsening earnings going forward.”

Rio jumped 9.1 percent to A$51. Chinalco, as the state- owned Chinese company is known, will buy $7.2 billion of convertible bonds and acquire stakes in projects for $12.3 billion. Rio shares fell 1.9 percent yesterday amid concern the sale of assets would hurt earnings and expansion plans.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.

Last Updated: February 13, 2009 18:06 EST