Asian stocks fell for the first time in four days on increased concern that economic growth will slow in the U.S., the region's largest export market, and as metal prices dropped.
Rio Tinto Group and Nippon Mining Holdings Inc., Japan's largest copper producer, slipped after a report showed U.S. manufacturing expanded in November at the slowest pace in 10 months, raising speculation that raw-materials demand will wane.
JFE Holdings Inc. led declines by steelmakers, while Komatsu Ltd., the world's second-largest maker of earthmoving equipment, fell on concern slowing economic expansion will dent capital investment.
``It's difficult to be bullish at the moment with the U.S. economy looking more like it's headed for a recession than a slowdown,'' said Toshio Konishi, who helps oversee $4.3 billion at Polar Capital Partners in Tokyo.
The MSCI Asia Pacific Index lost 0.2 percent to 161.90 as of 1:46 p.m. in Tokyo, snapping a three-day, 3.6 percent rally. A measure of mining companies and steelmakers posted the biggest drop among the benchmark's 10 industry groups.
Japan's Nikkei 225 Stock Average declined 0.6 percent to 15,530.84. Ping An Insurance (Group) Co. rose after receiving regulatory approval to invest as much as 15 percent of assets overseas, including in Hong Kong, where the Hang Seng Index jumped 0.9 percent. About half of Asia's stock benchmarks fell.
The U.S. Institute for Supply Management's factory index fell to 50.8, matching economists' forecasts, from 50.9 the previous month, the Tempe, Arizona-based group said yesterday. Fifty is the dividing line between contraction and expansion.
Manufacturing Slowdown
The manufacturing report contributed to a measure of six metals traded on the London Metal Exchange, including copper and nickel, slipping 2.6 percent yesterday, the most in seven trading days. Copper lost 2.9 percent. Nickel fell 1.1 percent.
Rio Tinto, the world's third-largest miner, fell 2.2 percent to A$143.70 and BHP Billiton Ltd., the largest, lost 0.5 percent to A$42.99. Nippon Mining slumped 4 percent to 776 yen.
``Industrial production is going to be downgraded on a forecast decline in U.S. volumes and our miners will be affected,'' said Tom Murphy, who helps manage the equivalent of $1 billion at Deutsche Bank AG in Sydney. ``The sector for us doesn't have the same upside as in recent years.''
The 136-member MSCI Asia-Pacific Materials Index lost 1.2 percent, after climbing 4.9 percent in the previous three days.
Steelmakers
The MSCI Asia Pacific Index has dropped 6.1 percent from its Nov. 1 record amid speculation rising losses tied to investments in U.S. subprime mortgages will slow growth in the world's largest economy. Federal Reserve Bank of San Francisco President Janet Yellen said yesterday financial conditions and consumer spending deteriorated more than she expected.
U.S. stocks dropped yesterday for the first time in five days. Financial companies led the Standard & Poor's 500 Index lower by 0.6 percent after Deutsche Bank AG said bond losses will hurt profits at U.S. brokerages.
JFE, the world's third-largest steelmaker, dropped 4.1 percent to 5,820 yen, while Nippon Steel Corp. declined 2.8 percent to 654 yen. China Steel Corp., Taiwan's largest, slipped 1.5 percent to NT$42.45.
Limiting declines, shares of Baoshan Iron & Steel Co., China's biggest steelmaker, jumped 5.2 percent to 15.52 yuan. Angang Steel Co., China's third-largest steelmaker by output, gained 3.9 percent to 25.77 yuan.
Steelmakers in China, the largest buyer of iron ore, and the government are studying a counter-bid for Rio Tinto, Chen Hanyu, a director at the resources office of Shougang Corp., said today in an interview in Beijing.
Komatsu, Ping An
BHP Billiton last month proposed a takeover offer of three of its shares for each Rio share.
``That's pretty positive for China's steelmakers,'' said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co. in Shanghai. ``The control of raw material costs makes sense.''
Komatsu, which relies on the U.S. as its biggest single market, plunged 5.4 percent to 3,180 yen. The company forecast on Oct. 30 that sales volume from North America will drop 20 percent for the business year amid the worsening housing slump.
Bridgestone Corp., Japan's biggest tiremaker, fell 1.4 percent to 2,095 yen, halting a six-day, 8 percent rally. The company generated almost half of its 2006 revenue in the Americas.
Ping An, China's second-biggest insurer, added 1.4 percent to HK$88.25 in Hong Kong. The China Insurance Regulatory Commission gave the company additional scope to invest abroad after last month letting it begin buying Hong Kong stocks with up to 5 percent of its total assets, Ping An said in a filing to the Shanghai Stock Exchange today.
Hong Kong's Hang Seng climbed 0.9 percent as investors bet inflows of funds from China would lift the city's stocks. It has gained 42 percent since Aug. 20, when China announced a plan that would allow mainland individuals to trade the city's shares.
China Mobile Ltd., the world's largest wireless operator by users, added 1.4 percent to HK$142.70 and China Life Insurance Co., the largest insurer by market value, rose 2 percent to HK$43.70.
(source: bloomberg.com)
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