Oct. 24 (Bloomberg) -- Asian stocks tumbled after Samsung Electronics Co.'s profit fell, Sony Corp. slashed its earnings forecast and Toyota Motor Corp. sales dropped for the first time in seven years.

South Korea's Kospi index plunged 11 percent, its biggest decline since September 2001, as Samsung sank 14 percent. Sony slumped 14 percent and Toyota lost more than 5 percent, sending Japan's Nikkei 225 Stock Average close to the lowest level since 1982. HSBC Holdings Plc tumbled 13 percent after Morgan Stanley cut its share-price target. The yen jumped to a 13-year high and Treasuries rose.

``Financial markets have crashed and are out of control,'' said Yuji Ogino, an executive director at Meiji Dresdner Asset Management Co., which manages the equivalent of $28 billion in Tokyo. ``This crash is different from anything I've experienced since getting into this business in the late 1980s and it's hard to find ways to ride out the situation.''

The MSCI Asia Pacific Index fell 5.1 percent to 80.99 as of 7:17 p.m. in Tokyo, capping its seventh weekly decline in the past eight weeks. More than 900 stocks slid on the 990-member index and seven of the 10 industry groups lost 4 percent or more.

MSCI's Asian index dropped 7.5 percent this week and has plunged 49 percent this year, its worst annual performance since the measure was created in 1980. Stocks tumbled after financial firms' mortgage-related losses swelled, worsening a global credit crisis that eventually toppled banks including Lehman Brothers Holdings Inc. The turmoil wiped out more than $10 trillion of global stock-market value this month.

Price Cut

The Nikkei 225 dropped 9.6 percent to 7,649.08, some 40 points away from its lowest level since 1982. The Kospi capped its worst week since at least 1987, losing 20 percent, as South Korea's economy grew at the slowest pace in four years.

India's Sensitive Index plunged 11 percent. State Bank of India led declines after the central bank said it will continue fighting inflation, reducing the likelihood of easier lending to bolster growth. The rupee fell against the dollar to a record low.

Stock declines have dragged valuations on MSCI's Asian index to 1.1 times book value, cheaper than those in the U.S. and Europe. The S&P trades at 1.8 times book value and the Dow Jones Stoxx 600 Index at 1.2 times. Asia's stocks traded as high as 2.6 times book in May 2007, when U.S. stocks were at 2.9 times and Europe was at 2.6 times.

`Off a Cliff'

Samsung, Asia's biggest maker of chips, flat screens and mobile phones, dropped 14 percent to 407,500 won in Seoul, its biggest decline since 1995. Third-quarter net income fell 44 percent, as a glut drove down prices of memory and displays. LG Electronics Inc., South Korea's second-largest electronics maker, slid 15 percent to 70,600 won.

``Slowing U.S. and European growth have sent shockwaves through the economies of the developing world,'' said Hiroshi Fujimoto, a fund manager at Shinkin Asset Management Co. in Tokyo, which manages the equivalent of $5.7 billion. ``Exporters are likely to see their sales drop off a cliff.''

Sony, the world's second-largest maker of consumer electronics, retreated 14 percent to 1,972 yen in Tokyo. Net income will drop 59 percent from a year earlier in the 12 months to March 31, Sony said yesterday, citing the stronger yen and worsening economic outlook.

The yen climbed to the highest since August 1995 against the dollar as the risk of a global recession prompted investors to slash carry trades, in which they fund purchases of higher- yielding assets with Japanese currency. The yen gained 3.2 percent to 94.19 against the dollar at 5:35 p.m. today, set for its highest level since August 1995. Against the euro, it rose 5.9 percent to 118.51.

Sony's Shadow

Panasonic Corp., the world's biggest consumer-electronics maker, fell 12 percent to 1,346 yen in Tokyo, the most since October 1987. Sharp Corp., Japan's largest maker of mobile phones and liquid-crystal displays, plummeted 14 percent to 631 yen, the lowest level since April 1982.

``Sony's announcement casts a shadow on all electronics shares,'' Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., said in an interview with Bloomberg Television.

Toyota Motor Corp., the world's second-largest automaker, fell 6.4 percent to 3,200 yen. The company said quarterly sales dropped 4.3 percent, the first decline in seven years, as the financial crisis crippled worldwide auto demand.

Lotte Shopping Co., South Korea's biggest department-store operator, lost a record 13 percent to 133,000 won, capping an eight-day, 40 percent plunge, after net income missed estimates.

Slowing Growth

South Korea's economy grew 0.6 percent in the last quarter from the previous three months, the weakest pace in four years, the central bank said. The data sparked concern a recession is looming in Asia's fourth-largest economy as consumers cut spending and the global slowdown damps export demand.

HSBC, the world's second-biggest bank by value, tumbled 12 percent to HK$88, the worst loss since October 1997, after Morgan Stanley cut its share-price estimate by 25 percent to HK$75.

State Bank of India, the nation's largest lender, plunged 15 percent to 1,122 rupees. The central bank kept interest rates unchanged and signaled it may hold borrowing costs in the coming weeks to balance inflation and growth concerns.

A decline in shipping rates sent China Cosco Holdings Co., the world's biggest operator of dry-bulk ships, down 15 percent to HK$3.40 in Hong Kong. STX Pan Ocean Co., South Korea's biggest, fell 19 percent to 69 cents in Singapore.

Freight, Air Traffic

The Baltic Dry Index, a measure of commodity-shipping rates, declined 5.9 percent yesterday in London, the lowest since Sept. 11, 2002. The gauge has plunged 62 percent since Oct. 3, the last time it rose. Goldman, Sachs & Co. slashed its price estimate for China Cosco by 73 percent to HK$4.30 in a report.

Air China Ltd., the nation's second-biggest carrier, sank 17 percent to HK$1.81, a record low. Cathay Pacific Airways Ltd., the largest in Hong Kong, lost 10 percent to HK$8.78.

Global airline-passenger traffic fell in September, the first drop in five years, the International Air Transport Association said. Passenger traffic hasn't fallen since the severe acute respiratory syndrome outbreak in 2003.

Also in Hong Kong, Jiangxi Copper Co., China's second- biggest smelter of the metal, lost 11 percent to HK$3.40. The company said last night the global financial turmoil has hurt sales and raw material purchases, and it may miss production targets.

To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net; Satoshi Kawano in Tokyo at Skawano1@bloomberg.net

Last Updated: October 24, 2008 06:35 EDT