Asian Stocks Fall on Near-Record Crude Oil; Cathay, Kepco Drop

By Chen Shiyin

July 14 (Bloomberg) -- Asian stocks fell for the first time in four days, led by airlines and shipping companies, on speculation that near-record crude-oil prices and a slump in transportation rates will hurt earnings.

Cathay Pacific Airways Ltd. led airlines lower on concern crude's surge beyond $147 a barrel on July 11 will raise fuel costs. Shipping lines declined, paced by Mitsui O.S.K. Lines Ltd., as a gauge of commodity-transportation rates dropped. Korea Electric Power Corp. slumped on speculation a price increase by the power supplier won't make up for increased fuel expenses.

``It's very tricky at the moment,'' Sean Fenton, who manages the equivalent of $700 million as portfolio manager at Tribeca Investment Partners in Sydney, said in a Bloomberg TV interview. ``You're seeing high oil prices destroy demand'' in some regions.

The MSCI Asia-Pacific Index lost 0.5 percent to 132.94 at 1:15 p.m. Tokyo time, after gaining as much as 0.6 percent. About two stocks retreated for each that gained on the measure, which has dropped 15 percent this year.

Most benchmarks declined, with Japan's Nikkei 225 Stock Average little changed at 13,044.81. Daiichi Sankyo Co. dropped after U.S. courts started probes against Ranbaxy Laboratories Ltd., which is set to be acquired by the Japanese drugmaker.

Posco advanced to a two-week high in Seoul, leading gains by steelmakers, after the company boosted its profit forecast.

U.S. markets declined on July 11, extending the longest stretch of weekly losses for the Standard & Poor's 500 Index since 2004, as growing concern about the health of Fannie Mae and Freddie Mac sent bank shares to an 11-year low.

To contact the reporter for this story: Chen Shiyin in Singapore at schen37@bloomberg.net; Hanny Wan in Hong Kong at hwan3@bloomberg.net.