Aug. 10 (Bloomberg) -- Asian stocks slumped the most in five months as a widening credit crunch hurt prices of Macquarie Bank Ltd., Toyota Motor Corp. and Samsung Electronics Co.

Macquarie Bank led financial companies lower after BNP Paribas SA halted withdrawals from funds that owned U.S. subprime, or higher risk, home loans. Exporters such as Toyota and Samsung dropped on concern losses linked to mortgages will lead to tighter lending conditions and dent global economic growth.

Benchmarks in the region's eight biggest markets all slid as much as 2 percent after subprime mortgage contagion and hedge fund losses sent U.S. stocks to their worst drop for five months.

South Korea's Kospi index plunged 4.2 percent, the most in three years. Australia's S&P/ASX 200 Index tumbled 3.7 percent, its biggest decline since September 2001. The Straits Times Index in Singapore, where the government today said the economy grew at the fastest pace in two years, posted its fourth straight weekly drop, the longest streak in 14 months.

``There are indiscriminate sell orders from panicked investors,'' said Liu Juming, a fund manager at Ta Chong Investment Trust Corp., which manages $1.1 billion of assets. ``The old saying in the investment world that `cash is king' came about because of days like today.''

The Morgan Stanley Capital International Asia-Pacific Index lost 3.1 percent to 149.05 as of 7:26 p.m. in Tokyo, the biggest drop since March 5. The measure, down 7.7 percent from its July 24 peak, is poised for its third weekly decline, the longest losing streak for five months.

Japan's Nikkei 225 Stock Average dropped 2.4 percent to 16,764.09, the most since March 14, as all markets fell. BHP Billiton Ltd., the world's largest mining company, slid after metals prices retreated.

Fund Losses

The Dow Jones Industrial Average slid 2.8 percent and the Standard & Poor's 500 Index dropped 3 percent, their worst declines since a Feb. 27 drop that was spurred by a sell-off in China. Earlier, losses had swept through all 18 western European markets. The Dow Jones Stoxx 600 Index lost 1.8 percent.

Futures on the S&P 500 were down 0.7 percent. Countrywide Financial Corp., the biggest U.S. mortgage lender, said after U.S. markets closed that ``unprecedented disruptions'' in the home- loan market may crimp its ability to lend and erode profit.

Macquarie, the largest Australian securities company, dropped 7 percent to A$72.10. Its Macquarie Fortress Investments Ltd. unit, which had $873 million in two high-yielding funds, said on July 31 it was forced to sell assets to avoid breaching loan agreements.

Mitsubishi UFJ Financial Group Inc., Japan's largest bank, slumped 3.3 percent to 1.18 million yen. HSBC Holdings Plc, Europe's biggest lender, lost 1.7 percent to HK$142.10 in Hong Kong. ICICI Bank Ltd., India's No. 2, fell 2.8 percent to 865.70 rupees.

`Various Exposures'

BNP Paribas yesterday joined Bear Stearns Cos. and Union Investment Management GmbH in stopping fund redemptions. The funds had about 1.6 billion euros ($2.2 billion) of assets on Aug. 7, after declining 20 percent in less than two weeks, a spokesman said. Its shares declined 3.4 percent to 82.57 euros.

Japan's Aozora Bank Ltd., which sold shares to the public in November, slumped 3.3 percent to 387 yen, after falling as much as 12 percent. The company said it wrote off a 4.5 billion yen ($38 million) unrealized loss from securities backed by U.S. subprime mortgage loans in the first quarter. Aozora had about 21 billion yen of securities linked to U.S. subprime loans as of June 30, the bank said in a statement.

Credit Crunch

Singapore's DBS Group Holdings Ltd., Southeast Asia's largest bank, fell 2.8 percent to S$21.20. The company said Aug. 3 that 22 percent of the $850 million it has in collateralized debt and loan obligations are based on asset-backed securities that have ``various exposures'' to U.S. subprime loans.

``This credit crunch will continue to weigh on stocks for a while,'' said Yoshihisa Okamoto, a Tokyo-based fund manager at Mizuho Asset Management Co. with $26 billion in assets. ``We just don't see an end to it and it's prompting everyone to sell.''

U.S. treasuries rose for a second day on demand for the safety of government debt. The yen strengthened against the euro, after the biggest gain in six years yesterday, as some investors trimmed holdings of riskier assets funded by loans in Japan.

Toyota, set to become the world's largest automaker by sales, slid 2.5 percent to 7,090 yen. Samsung, Asia's top maker of computer chips and mobile phones, fell 2.9 percent to 603,000 won. Taiwan Semiconductor Manufacturing Co., the world's largest maker of customized chips, lost 3.6 percent to NT$61.50.

Very Wary

``This is a financial event in the U.S., it's not a real economy event so it really doesn't have much direct impact on Asia, but nevertheless, investors are very wary,'' said Geoff Lewis, head of investment services at JF Asset Management Ltd., which oversees $98 billion. ``Only if this subprime thing has a really big impact on the U.S. economy would it then have some impact on Asia.''

After trading began in Tokyo, the Bank of Japan said it will add 1 trillion yen of funds to the banking system, following similar moves by other central banks.

The European Central Bank said it would provide unlimited cash as the fastest increase in overnight Libor, the rates banks charge each other to lend in dollars, since 2004 signaled lenders are cutting the supply of money.

The U.S. Federal Reserve added $24 billion in temporary reserves to the banking system. Canada's central bank put C$1.64 billion ($1.55 billion) into financial markets yesterday.

BHP dropped 5.5 percent to A$34.66. Rio Tinto Group, the world's third-biggest mining company, fell 4 percent to A$84.77. Nippon Mining Holdings Inc., Japan's No. 1 copper producer, slumped 7.1 percent to 919 yen.

Resignation?

A measure of six metals on the London Metal Exchange dropped 2 percent yesterday to its lowest in more than five months. The index hasn't climbed since July 31. Copper fell 1.5 percent, nickel declined 3.9 percent, its biggest fall in more than a month, and zinc lost 1.5 percent.

Elsewhere, Telstra Corp., Australia's largest telephone company, dropped 4 percent to A$4.34. Chief Executive Sol Trujillo may step down by the middle of next year, earlier than expected, the Sydney Morning Herald said, citing market analysts.

The company yesterday forecast pretax earnings will rise as much as 3 percent in the year started July 1, less than Citigroup Inc.'s 4.4 percent estimate.

Among stocks that rose in the region today, China Shipping Container Lines Co., Asia's second-largest container carrier, jumped 3.6 percent to HK$7.24 in Hong Kong after a one-day suspension. The company said it plans to sell 1.5 billion yuan- denominated A shares in Shanghai to buy ships.

Aozora Bank Ltd. (8304 JT)
BHP Billiton Ltd.(BHP AU)
China Shipping Container Lines Co. (2866 HK)
DBS Group Holdings Ltd. (DBS SP)
ICICI Bank Ltd. (ICICIBC IN)
HSBC Holdings Plc (5 HK)
Macquarie Bank Ltd. (MBL AU)
Mitsubishi UFJ Financial Group Inc. (8306 JT)
Nippon Mining Holdings Inc. (5016 JT)
Rio Tinto Group (RIO AU)
Samsung Electronics Co. (005930 KS)
Taiwan Semiconductor Manufacturing Co. (2330 TT)
Telstra Corp. (TLS AU)
Toyota Motor Corp. (7203 JT)

To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net

Last Updated: August 10, 2007 06:29 EDT