By Shani Raja

May 5 (Bloomberg) -- Asian stocks slumped, extending a global rout, as concern grew that Europe’s government debt crisis will spread beyond Greece and derail the global recovery.

HSBC Holdings Plc, Europe’s largest bank, fell 1.6 percent in Hong Kong. Australia’s Westpac Banking Corp. lost 3.8 percent even after reporting a surge in first-half profit. BHP Billiton Ltd., the world’s largest mining company, fell 0.8 percent in Sydney after an index of commodity prices plunged the most in three months. Hong Kong-listed Cnooc Ltd., China’s largest offshore oil producer, slumped 3.8 percent.

The MSCI Asia Pacific excluding Japan Index dropped 1.9 percent to 410.23 as of 12:26 p.m. in Hong Kong. The gauge has climbed 9 percent from its low this year on Feb. 8 as better- than-estimated economic data and earnings around the world offset European debt concerns. Spanish and Portuguese bonds slid yesterday amid worries over the countries’ ability to cut budget deficits that are among the highest in the euro area.

“Investors have clearly shifted their focus from strengthening corporate earnings and an improving macroeconomic backdrop to the problem of sovereign debt,” said Nader Naeimi, a strategist at AMP Capital Investors Ltd. who helps oversee $90 billion for the Sydney-based mutual-funds manager.

Hong Kong’s Hang Seng Index slumped 2.1 percent, while China’s Shanghai Composite Index declined 1.2 percent. Chinese real-estate developers retreated after a housing minister said the nation must act to curb rising property prices. Taiwan’s Taiex lost 2.8 percent.

Global Slump

Markets in Japan, South Korea and Thailand are closed. Australia’s S&P/ASX 200 Index sank 1.4 percent. The Philippine Stock Index tumbled 3.5 percent as faulty malfunctioning vote- counting machines raised concern there will be a delay in choosing a new leader to replace President Gloria Arroyo.

Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The gauge declined 2.4 percent yesterday even after Spanish Prime Minister Jose Luis Rodriguez Zapatero said the nation has “strong solvency.”

The MSCI World Index dropped 0.3 percent today, extending yesterday’s 2.6 percent slide. Declines yesterday wiped $1.1 trillion from the value of global equity markets, according to data compiled by Bloomberg.

“There is no dispute that risk appetite has come right off with the European worries,” said Prasad Patkar, who helps manage $1.7 billion at Platypus Asset Management Ltd. in Sydney. “Damage caused by contagion is so firmly etched in people’s mind from the dark days of the financial crisis that no one wants to be caught long risk whilst this sword is hanging over our heads.”

HSBC, Westpac

Finance companies and material producers accounted for 53 percent of the MSCI Asia Pacific excluding Japan Index’s decline today. HSBC retreated 1.6 percent to HK$77.75. Standard Chartered Plc, the British bank that generates the majority of its earnings in Asia, lost 2.5 percent to HK$205.80.

Westpac, Australia’s No. 2 lender, dropped 3.8 percent to A$26.29 in Sydney and slumped 5.4 percent to NZ$33.10 in Wellington even after saying first-half net income climbed 32 percent to A$2.88 billion ($2.6 billion). The global economy is still uncertain and the lender “remains cautious,” Westpac said.

“We’ll be living with the effects and the consequences of this crisis for many years to come,” Westpac Chief Executive Officer Gail Kelly said.

In Hong Kong, Cosco Pacific Ltd., which took over some operations in Greece’s Piraeus port last year, retreated 4.3 percent to HK$9.82. Esprit Holdings Ltd., a clothier that gets about 85 percent of its revenue in Europe, tumbled 6 percent to HK$51.30.

Stock Valuations

Commodity producers declined after the Reuters/Jefferies CRB Index of 19 raw materials fell 2.3 percent yesterday, the biggest slide since Feb. 4. Nickel, silver and gasoline led the declines. Crude oil in New York dropped the most in three months.

BHP fell 0.8 percent to A$38.29, while Woodside Petroleum Ltd., Australia’s No. 2 oil and gas producer, sank 1.5 percent to A$44.56. New Zealand Oil & Gas Ltd. dropped 3.2 percent to NZ$1.51. Cnooc slumped 3.8 percent to HK$13.36 in Hong Kong.

The MSCI Asia Pacific Index, which tracks Japan, has climbed 7.2 percent from its February low. Shares in the gauge trade at an average 15.6 times estimated earnings, compared with 14.6 times for the S&P 500 Index. The MSCI Asia Pacific excluding Japan Index is at 13.4 times.

Asset Bubbles

Real-estate developers in China declined after Vice Housing Minister Qiu Baoxing said the nation must act to curb the formation of asset bubbles, according to a statement posted to the Web site of the Ministry of Housing and Urban-Rural Development.

China Vanke Co., the nation’s biggest listed property developer, dropped 0.7 percent to 7.40 yuan. Poly Real Estate Group Co., the second largest, lost 0.8 percent to 11.33 yuan. Gemdale Corp., the fourth largest, slid 1.4 percent to 6.35 yuan.

The government last month imposed a ban on loans for third- home purchases and raised mortgage rates and down-payment requirements for second-home purchases to curb housing prices, which rose at a record 11.7 percent in March.

“Investors are concerned about more severe measures down the road,” said Zhang Kun, Shanghai-based strategist at Guotai Junan Securities Co.

In Taipei, Chunghwa Picture Tubes Ltd., a flat-panel maker, slumped 6.9 percent to NT$2.56 after becoming a “full-delivery” stock today, meaning the shares cannot be traded on margin or be sold short.

--With assistance from Weiyi Lim in Taipei and Zhang Shidong in Shanghai. Editors: Darren Boey, Nick Gentle.