DEZ
Asian Stocks Have Biggest Drop in 10 Months as Inpex, BHP Slide
Feb. 8 (Bloomberg) -- Asian stocks had their biggest slide in almost 10 months after oil and metals prices slumped, triggering declines by Inpex Corp. and BHP Billiton.
Japanese exporters including Sony Corp. and Toyota Motor Corp. fell on concern yen gains will erode the local-currency value of their overseas sales.
``Investors are worried about the outlook for commodity prices as the drops were sudden and large,'' said Takeshi Yamaguchi, who helps manage about $674 million at Sumitomo Mitsui Asset Co. in Tokyo. The strengthening of the yen ``also prompted some investors to shift their money out of exporters.''
The Morgan Stanley Capital International Asia-Pacific Index lost 2.4 percent to 125.37 as of 9:32 p.m. in Tokyo, the biggest drop since April 18. Measures of materials and energy stocks were the two worst performers among the index's 10 industry groups.
Japan's Nikkei 225 Stock Average plunged 2.7 percent to 16,272.68, making it the worst performer in the region. South Korea's Kospi index lost 1.6 percent and Australia's S&P/ASX 200 Index dropped 1.5 percent. Only China's stock indexes rose in the region. Pakistan's market was closed for a holiday.
Crude-oil futures in New York yesterday plunged 3.1 percent to $63.09 a barrel, the lowest close since Jan. 5 and the biggest single-day decline since Dec. 16. Prices were recently at $62.79.
Oil, Metals
Inpex, Japan's largest oil explorer, fell 7.6 percent to 1.21 million yen. PetroChina Co., the nation's largest oil company, slid 4.5 percent to HK$7.50 and Woodside Petroleum Ltd., Australia's second-biggest oil and gas producer, lost 3.3 percent to A$41.35.
Cnooc Ltd. declined 2.9 percent to HK$6.60. Credit Suisse cut its rating on China's largest offshore oil producer to ``neutral'' from ``outperform,'' after a 67 percent jump in the past year lifted the shares above the brokerage's share-price estimate of HK$6.20.
Among metals prices, copper futures fell from a record in Shanghai, posting the biggest drop in at least three weeks after a report yesterday showed stockpiles reached a 16-month high. The Reuters Jefferies CRB Index of 19 commodities fell 2 percent yesterday, the most since June 28.
BHP Billiton, the world's biggest mining company, dropped 5.2 percent to A$24.37. Rio Tinto Group, the third largest, lost 3.1 percent to A$72.75. Sumitomo Metal Mining Co., Japan's second-largest copper smelter, declined 4.7 percent to 1,620 yen. Jiangxi Copper Co., China's largest producer of the metal, slid 7.8 percent to 7.19 yuan.
Newcrest Mining Ltd., Australia's biggest gold miner, declined 5.6 percent to A$25.17. The MSCI Materials Index, which tracks 117 mining companies and steelmakers, dropped 3.8 percent, the biggest slide among the MSCI's 10 industry groups.
Stronger Yen
The yen traded at 117.91 per dollar in Tokyo, up from 117.95 late yesterday in New York. The currency yesterday had its biggest gain since Jan. 6 on speculation the Bank of Japan will signal it's getting closer to ending its policy of holding interest rates near zero to fight deflation.
A weaker U.S. currency means Japanese exporters get less for their dollar-denominated sales while their products shipped to the U.S. become less competitive.
Sony, the world's second-biggest consumer electronics maker, declined 2.3 percent to 5,600 yen. Toyota, the world's largest automaker by market value, fell 1.1 percent to 6,050 yen. The company's annual operating profit loses about 20 billion yen ($169 million) for every 1 yen that the currency strengthens against the dollar, according to Credit Suisse.
Nissan Motor Co., Japan's second-largest automaker, fell 0.7 percent to 1,302 yen. Nissan's annual operating profit drops about 11.5 billion yen for every 1-yen gain against the dollar, according to Merrill Lynch & Co.
U.S. Slowdown?
Concern the U.S. economy, the world's biggest, is cooling contributed to slides in Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co.
Toll Brothers Inc., the largest U.S. builder of luxury homes, said yesterday 2006 sales will be less than its forecast. The Standard & Poor's 500 Index has slumped 3 percent since hitting a four-year high on Jan. 11, following disappointing results from companies such as Intel Corp. and Citigroup Inc.
Samsung Electronics, South Korea's largest exporter, fell 2.3 percent to 690,000 won. Taiwan Semiconductor, the world's largest supplier of made-to-order computer chips, fell 2.9 percent to NT$63.1.
``There are growing concerns about a slowdown in the U.S. economy, which is negative for investor sentiment on exporters,'' said Lee Kun Hak, who helps manage about $600 million at CJ Asset Management Co. in Seoul.
Steel Glut
In Australia, BlueScope Steel Ltd. slumped 12 percent to A$6.56, the biggest percentage decline among the MSCI regional index's 1,034 constituents. Australia's largest steelmaker cut its full-year profit forecast by as much as 35 percent after prices for the alloy fell because of a glut in China.
Boral Ltd., the largest seller of building materials in Australia, slipped 1.5 percent to A$8.63. First-half profit fell 8.8 percent as a housing slowdown outweighed growth in commercial construction and infrastructure projects.
``Softness in steel and building materials was expected, but perhaps not to this extent,'' said Paul Xiradis, who helps manage $2.3 billion at Ausbil Dexia Ltd. in Sydney. ``The market overall has moved up in accordance with expectations for earnings, so any company that doesn't meet them will take a bath.''
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