Feb. 28 (Bloomberg) -- Asian stocks fell the most in eight months, extending a rout in global equities that started in China and triggered a slump in the U.S. compounded by signs the world's largest economy is slowing.

Japan's Nikkei 225 Stock Average posted the biggest loss since June, led by Sony Corp. China Mobile Ltd. helped Hong Kong stocks to the largest decline since November. Today's drop wiped at least $250 billion off the region's equities.

``There's no way we'll be decoupled from what happens to the major markets,'' said Wong Shou Ning, who helps manage $136 million at Kenanga Investment Management Sdn. in Kuala Lumpur. ``It will be question of how bad one will get hit.''

The Morgan Stanley Capital International Asia-Pacific Index fell 3.1 percent to 144.15 at 7:41 p.m. in Tokyo. The gauge dropped the most since June 13, as did the Nikkei 225, which slumped 2.9 percent. China United Telecommunications Corp. led a 3.5 percent rebound in the Shanghai and Shenzhen 300 Index, after yesterday's 9.2 percent tumble.

The Dow Jones Industrial Average yesterday slid 3.3 percent while the Standard & Poor's 500 Index lost 3.5 percent, wiping out their year-to-date gains. Futures on the S&P 500 added 0.8 percent, while the contract on the Dow Jones average rose 0.6 percent. Shares also fell as U.S. durable goods orders in January declined by the most in three years.

BHP Billiton led Australia's drop today, while Posco fell in South Korea. Hong Kong's Hang Seng slid 2.5 percent, its largest drop since Nov. 28. The Philippines' key stock index tumbled 7.9 percent, the biggest decline in the region and the most in nine years. India's Sensitive Index slide 4 percent. All other markets fell. Taiwan was closed.

Clamp Down

Toyota Motor Corp. added to the drop in Japan after the yen strengthened against the dollar in New York, eroding the value of exporters' sales.

China's stocks ended last week at an all-time high, having jumped 13 percent in the previous six days. The Shanghai Composite Index yesterday plunged 8.8 percent, the steepest drop since Feb. 18, 1997. The rout wiped $107.8 billion from the market value of China's companies, which had doubled in the past year.

Stocks fell after the State Council, China's highest ruling body, approved a special task force to clamp down on illegal share offerings and other banned activities in the market. Investors were concerned the government will introduce further measures at a meeting of China's legislature next week.

The government said it won't impose a capital gains tax on stock investment, the Shanghai Securities News reported today, citing officials at the finance ministry and tax bureau.

Regional Selloff

A 3.1 percent decline in the MSCI's Asia-Pacific index is the equivalent of $239 billion of the 1,068-member measure's market capitalization, according to Bloomberg data. The benchmark was worth $8.24 trillion at the end of trading yesterday.

Japan's Sony, the world's largest maker of computer-game consoles, fell 5.4 percent to 6,170 yen. South Korea's Posco, the world's No.3 steelmaker, slumped 5.2 percent to 353,000 won. China was the company's largest market after South Korea in 2005.

``Any fallout in the Chinese economy will ultimately affect many companies worldwide,'' said Shane Oliver, who helps manage $64 billion at AMP Ltd. in Sydney. Chinese investors ``own the overwhelming majority of shares there. Foreigners are mainly targeting other Asian markets where they have substantially more holdings.''

`More Downside'

BHP, the world's biggest mining company by market value and production, lost 6 percent to A$27.13. Fiscal first-half sales to China rose 36 percent to $4 billion from a year earlier, the company said. Rio Tinto Group, the second-biggest by market value, dropped 5 percent to A$75.60. It generated 16 percent of its total sales from China in 2006.

Hong Kong's Hang Seng Index extended yesterday's 2.5 percent decline. The Hang Seng China Enterprises Index, which tracks the so-called H shares of 37 mainland companies, fell 3.2 percent.

China Mobile, the world's largest cell-phone operator by users, dropped 3.1 percent to HK$72.60 in Hong Kong. PetroChina Co., China's largest oil producer, declined 2.7 percent to HK$9.11.

``It's not just a one-day drop,'' said Andy Mantel, managing director of Pacific Sun Investment Management in Hong Kong. ``There's more room in the downside. My strategy is to increase in cash and shorts.''

The Shanghai and Shenzhen 300 rose today after the Shanghai Securities News report and after the Oriental Morning Post said China may allow qualified foreign investors to buy as much as $120 billion of domestic equities, an equivalent to 10 percent the value of China's stock market.

Confidence Returning

China United Telecommunications, which controls the nation's second-largest mobile-phone operator, rose 7.4 percent to 5.25 yuan. It tumbled 9.9 percent yesterday. China Yangtze Power Co., owner of the world's biggest hydropower project, jumped 7.6 percent to 15.30 yuan after a 10 percent slide.

``Confidence is regaining now after the rumors that hit the market,'' said Lu Yizhen, who helps manage about $640 million at Citic-Prudential Fund Management Co. in Shanghai. ``For the long- term, China's stocks still point to an upside trend.''

China's share price slump yesterday was a ``normal correction,'' and the government has no plans to buoy the stock market, Zhu Jian, the Shanghai-based director of the China Securities Regulatory Commission, said today.

Toyota, Japan's largest automaker, dropped 3.8 percent to 8,020 yen. Matsushita Electric Industrial Co., the world's No. 1 maker of consumer electronics, lost 3 percent to 2,390 yen.

The yen rose the most in more than 19 months against the dollar amid a sell-off in U.S. stocks and as investors shunned emerging-market assets, prompting an unwinding of trades betting on a decline in the Japanese currency.

The currency rose 2.3 percent to 117.93 against the dollar late in New York yesterday, the biggest gain since July 2005. It was at 118.34 recently.

``China's drop yesterday shocked risk-money investors, as did the yen's climb,'' said Mitsushige Akino, who oversees about $468 million in assets at Ichiyoshi Investment Management Co. in Tokyo. ``Stocks should fall across the board.''

To contact the reporters on this story: Darren Boey in Hong Kong at dboey@bloomberg.net; Stuart Kelly in Sydney skelly22@bloomberg.net.

Last Updated: February 28, 2007 05:59 EST