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Asian Stocks Fall, Snapping Record Rally, on Earnings, Metals

Asian stocks fell, adding to the regional benchmark index's worst month ever, as a record three- day rally fizzled after weaker profit forecasts and a slump in metals prices deepened concern global demand is slowing.

Denso Corp., the world's largest listed auto-parts maker, and electronic-equipment maker Kyocera Corp. slid more than 4 percent in Tokyo after projecting lower earnings. BHP Billiton Ltd. declined 4.3 percent after an index of metals traded in London tumbled the most since October 2004. KT Corp. lost 2.9 percent after posting its seventh straight profit drop.

"Yesterday's rally was too good to be true," Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages about $53 billion, said in an interview with Bloomberg Television. "Investors are very likely to take this chance to lock in profits."

The MSCI Asia Pacific Index retreated 2.3 percent to 86.20 as of 9:18 a.m. in Tokyo. It's set to lose 19 percent this month, the biggest decline since the gauge was created in 1987.

The Asian index jumped 17 percent in the previous three days as U.S. and China interest-rate cuts and a Federal Reserve plan to provide $120 billion to emerging markets eased investor concern that a credit freeze will derail economic growth.

Japan's Nikkei 225 Stock Average lost 3.6 percent to 8,704.44, snapping a three-day, 26 percent advance that was the biggest since at least 1970. South Korea's Kospi index rose 0.6 percent, extending yesterday's record climb of 12 percent.

Futures on the U.S. Standard & Poor's 500 Index slipped 0.7 percent today. U.S. stocks gained yesterday, with the S&P 500 advancing 2.6 percent to 954.09, after gross domestic product contracted less than economists had estimated.

An index of six metals traded on the London Metal Exchange fell 7.8 percent yesterday, the biggest decline since October 2004. Crude oil dropped $1.54, or 2.3 percent, to settle at $65.96 a barrel in New York.