Asian Commodity Stocks Rise, Led by BHP Billiton; Hon Hai Drops

By Chua Kong Ho and Ian C. Sayson

July 22 (Bloomberg) -- Asian commodity stocks rose after metals prices climbed, countering declines in technology companies on concern that slowing growth will damp demand for consumer electronics.

BHP Billiton Ltd., the world's largest mining company, advanced in Sydney as gold climbed for a second day. Sino Gold Mining Ltd. jumped after more than tripling output at a mine. Samsung Electronics Co. and Hon Hai Precision Industry Co. declined after Texas Instruments Inc. and Apple Inc. forecast lower-than-estimated earnings. Japanese stocks jumped as they resumed trading following a holiday yesterday, when Asia's benchmark index surged the most in four months.

``Money is still going into commodities stocks on expectations the sector will have more stable earnings than other areas,'' said Choi Min Jai, who helps manage about $5 billion at KTB Asset Management Co. in Seoul. ``Technology stocks aren't a good area to be in'' because of ``weak demand in the U.S. and Europe,'' he said.

The MSCI Asia Pacific Index gained 1.2 percent to 132.87 as of 2:34 p.m. in Tokyo. Japan's Nikkei 225 Stock Average added 2.1 percent to 13,065.54.

Most Asian benchmark indexes declined. Australia's S&P/ASX 200 Index dropped 0.3 percent, led by National Australia Bank Ltd., after Citigroup Inc. cut its price target on the country's top five banks.

The MSCI index has lost 16 percent this year, part of a global slump in equities that has erased more about $13.3 trillion from an October record, as raw-material prices soared and the world's largest banks and securities firms reported more than $447 billion of writedowns and credit losses.

Standard & Poor's 500 Index futures fell 0.8 percent after lower-than-estimated earnings at American Express Co. and Apple's forecasts.

Metals Gain

BHP added 2 percent to A$38.96, while rival Rio Tinto Group advanced 1.8 percent to A$120.60. Sino Gold, owner of China's second-largest bullion mine, jumped 11 percent to A$6.05. The company raised output at its Jinfeng project to take advantage of higher prices.

Gold rose in Asia for a second day, gaining 0.3 percent to $968.70 an ounce, as the dollar traded near a record low against the euro, boosting the appeal of the precious metal as an alternative investment. Copper also advanced for a second day, climbing 0.6 percent. A measure of six metals traded on the London Metal Exchange gained 0.7 percent yesterday.

Nippon Mining Holdings Inc., Japan's largest biggest copper producer, gained 4.7 percent to 619 yen.

Samsung, the world's biggest computer-memory maker, dropped 2.7 percent to 583,000 won, the second-biggest drag on MSCI's Asian gauge. Taiwan Semiconductor Manufacturing Co., the largest maker of made-to-order chips, slid 4 percent to NT$57.40.

Technology Stocks

Texas Instruments, the second-biggest U.S. semiconductor maker, forecast profit for the third quarter of 41 cents to 47 cents a share. Analysts estimate earnings of 51 cents. Apple forecast fourth-quarter earnings will be about $1 a share, below the $1.24 anticipated by analysts in a Bloomberg survey.

Hon Hai, the contract manufacturer of iPods, declined 1 percent to NT$149.50.

Tokyo Electron Ltd., the world's second-largest maker of chip gear, fell 1.3 percent to 6,050 yen. Nikon Corp., Japan's largest maker of steppers used to make semiconductors, retreated 4 percent to 3,130 yen.

Nomura Holdings Inc. cut its rating on Japan's semiconductor-manufacturing equipment industry to ``neutral'' from ``bullish.''

``Earnings growth estimates are way too bullish in the face of a global slowdown,'' said Nicole Sze, a Singapore-based investment analyst at Bank Julius Baer & Co., which manages $350 billion in assets worldwide. ``We're at the start of an earnings downgrade cycle, with the export-driven sectors most at risk.''

Share Sale

Lenovo Group Ltd., China's biggest maker of personal computers, fell 5 percent to HK$5.30, the most in two weeks after International Business Machines Corp. offered to sell shares in the company. The stock also declined after JPMorgan Chase & Co. cut its recommendation on Lenovo shares to ``neutral'' from ``outperform'' today, citing a possible slowdown in sales growth.

National Australia, the country's largest bank, lost 2.8 percent to A$27.54. Commonwealth Bank of Australia, the nation's biggest provider of home loans, declined 1.4 percent to A$42.76.

Citigroup cut National Australia to ``sell'' from ``hold'' and lowered its estimate for bank profits by as much as 12 percent, citing bad debts and slowing lending.

Australia & New Zealand Banking Group Ltd. lost 3.7 percent to A$18.10, the most in a week, after Morgan Stanley cut its stock rating to ``underweight'' from ``equal-weight,'' citing a deteriorating operating outlook in New Zealand.

Bharat Heavy Electricals Ltd., whose equipment lights three of every five homes in India, added 3.7 percent to 1,562.05 rupees, the third-biggest gainer on the Sensitive Index, after beating analysts' estimates with a 33 percent increase in first- quarter profit.

CSL Ltd., which earns royalties from sales of Merck & Co.'s Gardasil vaccine for cervical cancer, tumbled 9 percent to A$33.39, the most since May 2003, after Merck said second-quarter sales of the drug declined. The stock had the third-biggest decline on MSCI's Asian gauge today.

To contact the reporter for this story: Chua Kong Ho at kchua6@bloomberg.net; Ian C. Sayson at