March 11 (Bloomberg) -- Asian stocks fell, led by Honda Motor Co. and Canon Inc., after the Standard & Poor's 500 Index slid for a third day on concern U.S. economic and profit growth won't be enough to justify share-price gains of the past year.

The Morgan Stanley Capital International Asia-Pacific Index shed 0.6 percent to 90.23 at 3 p.m. in Tokyo, with benchmarks falling in all markets except China, Taiwan, Malaysia and New Zealand. All of the MSCI Asia Pacific's 10 industry groups fell, paced by raw material stocks such as BHP Billiton, the only group to slide this year.

A drop in U.S. stocks ``does cause sentiment to deteriorate in other markets, including Japan,'' said John R. Alkire, who helps manage $21 billion as chief investment officer at Morgan Stanley Asset & Investment Trust Management Co. in Tokyo.

Japan's Nikkei 225 Stock Average slid 1.2 percent to 11,297.04 at the 3 p.m. close in Tokyo as the yen rose against the dollar, adding to concern its gains will erode exporters earnings.

The Hang Seng China Enterprises Index of Chinese shares traded in Hong Kong, or H shares, slumped 3.6 percent, led by China Life Insurance Co. The index shed 1.8 percent yesterday after the government said industrial production growth in January and February slowed.

In the U.S., the S&P 500 and the Dow Jones Industrial Average each lost 1.5 percent, erasing gains for this year. The Nasdaq Composite Index slid 1.6 percent. The U.S. economy is forecast to grow at an annual rate of 4.5 percent in the first six months of 2004 and slow to 4 percent in the fourth quarter, according to economists surveyed by Bloomberg News.

Yen Gains

Honda Motor, which gets 90 percent of its operating profit from North America, slumped 3.6 percent to 4,800 yen.

Canon shed 3.7 percent to 5,250 yen. The world's biggest seller of digital cameras cut its sales forecast for next year by 5.3 percent because of competition and the yen's strength against the dollar, President Fujio Mitarai said this week.

Exporters also slid after the yen rose, even after the central bank sold the currency overnight in New York according to traders at banks that deal with the Bank of Japan who asked not to be identified. The yen rose to 110.66 per dollar, from about 111.20 when the Japanese stock market closed yesterday.

Central bank intervention ``may temporarily stop the yen from strengthening, but it can't go on forever,'' said Stefan Labrack, head of equity sales at CLSA Asia Pacific Markets in Tokyo. ``The gain in the yen affects future earnings for exporters.''

China H shares and raw materials producers declined on concern that economic growth in China may slow. China said yesterday industrial production growth slowed in the first two months this year, the first time since September, as the government curbed investment in the steel, cement and aluminum industries.

H Shares

China Life Insurance, China's biggest insurer, declined 3.7 percent to HK$5.25. PetroChina Co., the nation's biggest oil and gas producer, shed 1.8 percent to HK$4.08, after dropping 1.8 percent yesterday. Last year the shares soared 187 percent.

China Shipping Development Co. dropped 7.8 percent to HK$5.35. Yanzhou Coal Mining Co., China's most profitable coal company, tumbled for a third day, losing 5.4 percent to HK$7.95.

BHP shed 1.9 percent to A$12.02, for a three-day drop of 4.3 percent. The world's biggest miner, which counts China as its biggest overseas market, has advanced 45 percent since last year's low set in May.

WMC Resources Ltd., the world's second-biggest supplier of nickel concentrate, shed 2.2 percent to A$4.81. The price of nickel for delivery in three months has fallen 11 percent this month on the London Metal Exchange.

``The China story is very important for stocks like BHP,'' said Tim Barker, who helps manage the equivalent of $30 billion at BT Financial Group in Sydney, including BHP shares. ``Any news of slowing Chinese growth will affect them.''

Calpers

The Philippine Stock Exchange Composite Index fell 1.4 percent, its biggest loss in almost six weeks.

Wilshire Associates Inc., adviser to the California Public Employees Retirement System, reiterated its advice that the largest U.S. pension fund should sell its $67 million worth of Philippine shares. Calpers last month asked Wilshire to review its recommendation.

``We're hostage to the deterioration in world equity markets this week,'' said Andrew Long, head of research at ATR-Kim Eng Securities Inc. in Manila. The Wilshire advice ``is not great for sentiment but is not as big as some suggest.''

Philippine Long Distance Telephone Co., the country's largest phone company, dropped 3.2 percent to 910 pesos. Ayala Corp., owner of the country's largest developer and No. 2 phone and banking companies, fell 4.9 percent to 5.80 pesos.

Slumping Confidence

South Korea's Kospi index dropped for a fifth day, its longest losing streak in more than a year, shedding 0.7 percent to 869.93.

Kookmin Bank, South Korea's largest lender, fell 2.5 percent to 46,800 won. Korea Electric Power Corp., the nation's dominant power provider, declined 3 percent to 20,850 won.

A government report showed consumer confidence fell from a 16-month high in February, suggesting households plan to tighten their purse strings in coming months after a credit binge left many struggling to meet debt payments.

The index fell to 96.3 from 98 in January, which was the highest since September 2002. A reading below 100 indicates more consumers are pessimistic than optimistic.

To contact the reporter on this story: Stuart Kelly in Sydney at skelly22@bloomberg.net and Lu Wang in New York at 2564 or Lwang8@bloomberg.net.

Last Updated: March 11, 2004 01:32 EST