Asian Stocks Advance, Trimming Worst First-Half Loss Since 1992

By Chen Shiyin and Masaki Kondo

June 30 (Bloomberg) -- Asian stocks advanced, trimming the regional index's worst first-half loss in 16 years, as energy and mining shares rose on higher raw material prices.

BHP Billiton Ltd., the world's largest mining company, and Mitsubishi Corp., Japan's biggest trading house, led gains after oil rose to a record and metals climbed in London. Sony Corp. and Samsung Electronics Co. dropped, weighing on Asia's benchmark, on concern record crude prices will cut demand while a weaker dollar slows earnings growth.

``Investors would like to remain invested in commodities- related stocks given their past performance and that metal and oil prices are still high,'' said Hiroshi Morikawa, a senior strategist at Tokyo-based MU Investments Co, which manages the equivalent of $14 billion. ``Uncertainty over the outlook for the U.S. economy is rising again.''

The MSCI Asia Pacific Index added 0.3 percent to 137.35 as of 10:45 a.m. in Tokyo, trimming its first-half loss to 13 percent. That's the worst performance since a 23 percent decline in the same period of 1992, when Japan's asset bubble was deflating.

Japan's Nikkei 225 Stock Average was little changed at 13,559.68, while the broader Topix index added 0.4 percent. About half of the region's stock benchmarks advanced.

U.S. stocks retreated on June 27, with the Dow Jones Industrial Average losing 0.9 percent. That left the 30-member index within 0.1 percent of a so-called bear market, defined as a 20 percent slump from its all-time high.

Oil, Metals

BHP added 2.1 percent to A$43.80. Mitsubishi Corp., which gets about half of its profit from commodities, rose 3 percent to 3,490 yen. Inpex Holdings Inc., Japan's No. 1 oil explorer, jumped 3.1 percent to 1.32 million yen.

Crude oil for August delivery rose as much as 1.2 percent to $141.83 today on the New York Mercantile Exchange, after surging to a high of $142.99 last week. A measure of six metals on the London Metal Exchange rose 0.6 percent on June 27, taking its two-day advance to 2.4 percent.

The MSCI Asian index has lost 8.4 percent this month as record oil worsened the outlook for global economic growth and concern grew that credit-market losses haven't reached an end. That will be its worst monthly drop since January, when the benchmark dropped 9 percent.

Sony, the world's second-biggest consumer-electronics maker, dropped 2.5 percent to 4,720 yen. Samsung, Asia's biggest maker of mobile phones, chips and flat panels, lost 1.7 percent to 632,000 won.

Weaker Dollar

Japanese exporters also retreated after the dollar traded near a three-week low against the yen before government data this week that may show U.S. employers cut jobs for a sixth consecutive month, damping expectations for an increase in interest rates.

The dollar traded at 106.35 yen at 9:25 a.m. in Tokyo, after falling to a three-week low of 105.87. A weaker dollar erodes the value of exporters' overseas sales.

Nintendo Co., maker of the Wii game console, declined 2 percent to 59,800 yen in Osaka. Elpida Memory Inc., the world's third-largest maker of computer memory chips, slipped 2.3 percent to 3,420 yen.

In Australia, Babcock & Brown Ltd. surged 14 percent to A$7.24, the largest advance on MSCI's Asian index, after it won a reprieve from a review of A$2.8 billion ($2.7 billion) of debt. Bank of Scotland Plc and a syndicate of 25 banks waived their right to review the debt after the securities firm agreed to higher repayments.

To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.