Asian Stocks Drop for Fifth Day on Record Oil, Credit Concerns

By Chen Shiyin

July 3 (Bloomberg) -- Asian stocks fell for a fifth day on concern record oil prices will weigh on global economic growth and speculation increased credit-market losses will deepen.

Toyota Motor Corp., Japan's largest automaker, dropped after oil climbed above $144 a barrel and Merrill Lynch & Co. said General Motors Corp., Toyota's largest U.S. rival, could face bankruptcy. Sumitomo Mitsui Financial Group Inc. and Kookmin Bank paced a slide among banks after Oppenheimer & Co. cut its earnings estimates for Merrill Lynch and Citigroup Inc.

The MSCI Asia-Pacific Index lost 1 percent to 133.25 at 9:14 a.m. in Tokyo, following a four-day, 3.2 percent retreat. Concern that surging commodity prices will fuel inflation and derail growth dragged the benchmark to the lowest since March 18, when turmoil in credit markets pushed up borrowing costs and led to the forced sale of Bear Stearns Cos. to JPMorgan Chase & Co.

Japan's Nikkei 225 Stock Average slipped 1.1 percent to 13,144.80, extending a 10-day retreat that was the longest since 1965. Benchmarks fell elsewhere in markets open for trading.

U.S. stocks declined yesterday, sending the Dow Jones Industrial Average into a bear market. GM plunged to a 54-year low after Merrill Lynch warned that ``bankruptcy is not impossible'' and lowered its rating on the automaker to ``underperform'' from ``buy.''

To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net.