HONG KONG (Bloomberg) -- Asian stocks slumped, led by Toyota Motor Co., after a decline in the dollar pushed the price of crude oil to almost $100 a barrel and the Federal Reserve cut its forecast for U.S. economic growth.

Toyota fell the most in more than a week and Honda Motor Co. had its biggest drop in three months as the yen strengthened beyond a two-year high against the dollar. Air China Ltd. sank on concern rising fuel costs will erode earnings. Commonwealth Bank of Australia slid after Freddie Mac, the second-biggest U.S. mortgage-finance company, reported a record loss.
“A spate of bad news related to the U.S. sub-prime-loan issue has made the outlook uncertain,” said Kazuyuki Terao, who helps oversee $1.7 billion at RCM Japan Ltd. in Tokyo. “With the chances of a U.S. economic slowdown on the rise, there are concerns that high commodity prices could squeeze corporate profits.”
The MSCI Asia Pacific Index lost 1.8 percent to 154.71 at 5:23 p.m. in Tokyo, with all 10 industry groups falling. Japan’s Nikkei 225 Stock Average slid 2.5 percent to 14,837.66, its lowest close since July 2006, and Hong Kong’s Hang Seng slumped 4.2 percent, on course for its steepest monthly drop in a decade. All Asian markets fell except New Zealand and Pakistan.
Air China, the world’s largest carrier by market value, led airlines lower on concern the rising price of oil will increase fuel charges. Nippon Steel Ltd. and JFE Holdings Inc., the world’s second- and third-largest steelmakers, both sank to the lowest in at least 11 months. BHP Billiton Ltd., Australia’s biggest oil producer, advanced.
--------------------------------- Oil, mortgage losses
“Energy-intensive industries such as steelmakers will be badly hurt with the higher oil costs,” said Ivan Tham, who helps manage about $5 billion in assets at City of London Investment in Singapore. “Airlines and other transportation companies will also be directly affected with increased fuel costs.”
MSCI’s Asia Pacific index has fallen 9.7 percent in November, on course for its worst month since September 2001, on concern losses related to U.S. mortgages will widen and the U.S. economy will enter a recession. Slumping markets have wiped out more than $3.1 trillion in market value worldwide this month to Tuesday.
Commonwealth Bank, Australia’s second biggest, declined 2.1 percent to A$58. Macquarie Group Ltd., the country’s largest securities firm, fell 2.7 percent to A$76.27. The slump in U.S. sub-prime mortgages contributed to the value of a fund sliding 27 percent in July, Macquarie previously said.
Mizuho Financial Group Inc., Japan’s second-largest publicly traded bank, slid 4.1 percent to 517,000 yen. The company last week cut its full-year profit forecast citing losses on investments in U.S. mortgage securities.
---------------------------------- ‘Pretty nervous’
Sompo Japan Insurance Inc. tumbled 16 percent to 1,008 yen, its biggest drop in a decade. The company, Japan’s third-largest insurer, may have to pay as much as 30 billion yen ($273 million) in sub-prime-related insurance claims, the company said Tuesday.
“The financial services sector is still pretty nervous about how things are panning out over there in the U.S.,” said Karl Siegling, who manages about $86 million at Cadence Capital in Sydney.
Freddie Mac posted a third-quarter net loss that was three times what some analysts estimated. The worst housing slump in 16 years caused “significant deterioration” in the period that will continue through year-end, Freddie Mac said. The Fed in minutes released Tuesday also expressed concern about credit- market losses.
HSBC Holdings Plc., Europe’s largest lender by market value, slid 2.5 percent to HK$131.8 in Hong Kong, a 19-month low. The London-based bank last week set aside $3.4 billion to cover U.S. defaults in the third quarter, $1.4 billion more than it forecast in July.
--------------------------------------- Fed lowers forecast
In the minutes from its October policy meeting, the Fed lowered its 2008 growth forecast for the U.S., the largest market for Asian exports, to as little as 1.8 percent from a previous estimate of 2.5 percent to 2.75 percent.
Toyota Motor, the world’s most valuable carmaker, fell 2.8 percent to 5,940 yen, the largest drag on the MSCI Asia Pacific index. Honda, Japan’s second-largest carmaker, dropped 4.5 percent to 3,620 yen. Samsung Electronics Co., South Korea’s top exporter, fell 3 percent to 515,000 won.
Japanese exporters also fell as the yen strengthened against the dollar, reducing the value of overseas sales when converted into local currency. The yen was at 109.13 per dollar, up from 110.38 at the close of stock trading in Tokyo Tuesday.
----------------------------------- Oil prices rise
Oil futures climbed 3.6 percent to $98.03 a barrel Tuesday in New York, the highest close since trading began in 1983. They rose as high as $99.29 yesterday in after-hours trading.
Air China fell 4.2 percent to HK$8.16 in Hong Kong. Singapore Airlines Ltd., the world’s second-biggest carrier, dropped 2.8 percent to S$17.40. Cathay Pacific Airways Ltd., Hong Kong’s biggest airline, lost 0.8 percent to HK$18.26.
BHP rose 1.9 percent to A$41.05. Santos Ltd., Australia’s third-largest oil company, gained 2.7 percent to A$13.56. Inpex Holdings Inc., Japan’s biggest oil explorer, added 3.6 percent to 1.15 million yen. The company’s stock rating was raised to “outperform” at Mitsubishi UFJ Financial Group Inc.
Proton Holdings Bhd., Malaysia’s state-owned carmaker, plunged 17 percent to 4.1 ringgit, the steepest drop in the MSCI Asia Pacific index, after the Malaysian government ended alliance talks with Volkswagen AG and General Motors Corp.