Asian Stocks Drop, Led by Commodities Producers, on Gold, Oil

By Patrick Rial

Aug. 12 (Bloomberg) -- Asian stocks declined, led by commodities producers, as gold tumbled to the lowest level since December and oil traded near a 14-week low.

Newcrest Mining Ltd., Australia's largest gold producer, fell in Sydney and Sumitomo Metal Mining Co. dropped in Japan. South Korea's Posco led steelmakers lower amid signs the Chinese market is weakening and after Japanese producers received fewer orders for the alloy. Singapore Telecommunications Ltd., Southeast Asia's largest phone company, slumped the most in three months after first-quarter profit missed analyst estimates.

The MSCI Asia Pacific Index lost 0.3 percent to 128.25 as of 10:43 a.m. in Tokyo, extending this year's decline to 19 percent.

Japan's Nikkei 225 Stock Average dropped 0.7 percent to 13,331.12. The country's wholesale inflation rate accelerated to a 27-year high as companies raised prices to offset oil and commodity costs. Most Asian benchmark indexes fell.

U.S. stocks climbed yesterday, with the Standard & Poor's 500 Index gaining 0.9 percent, after oil's drop below $115 a barrel boosted retailers and credit card companies.

Newcrest fell 5.3 percent to A$22.96, the lowest since September. BHP Billiton Ltd., the world's largest mining company, lost 0.9 percent to A$36.13. Sumitomo Metal, Japan's biggest nickel maker, declined 4.8 percent to 1,266 yen.

Gold dropped 4.2 percent to $828.30, the lowest since Dec. 24. A measure of six metals traded on the London Metal Exchange, including copper and zinc, slid 1 percent yesterday. Crude prices have slumped 21 percent from a record on July 14 to close at $114.45 in New York.

Steelmakers Retreat

Raw-material producers on MSCI's Asian gauge have tumbled 10 percent this month, compared with a 2.7 percent decline on the broader index.

Posco, Asia's third-largest steelmaker, fell 1.5 percent to 470,000 won. Nippon Steel Corp., the region's biggest, declined 3 percent to 525 yen. JFE Holdings Inc., Japan's No. 2, slumped 3.6 percent to 4,600 yen.

China exported a record amount of steel, the nation's customs bureau said yesterday, as prices for the domestic market have started to weaken. The Japan Iron and Steel Federation said yesterday June orders for steel fell 0.8 percent from the previous month.

``The price downtrend is gathering speed in China,'' Atsushi Yamaguchi, a Tokyo-based steel analyst at UBS AG, wrote in a note to clients. ``If market sentiment becomes even weaker, we may need to be cautious, as prices tend to move in one direction in China.''

Singapore Telecommunications reported first-quarter profit fell 5.3 percent to S$878.1 million ($622 million) as a stronger currency eroded overseas earnings. Profit, the lowest in two years, missed the S$902 million median of analyst estimates in a Bloomberg survey.

Japanese Earnings

Ajinomoto Co., Japan's biggest food producer, lost 3.1 percent to 1,043 yen after saying yesterday first-quarter profit dropped 57 percent to 3.75 billion yen ($34 million.) The Tokyo- based company's rating was lowered to ``hold'' from ``buy'' by Nikko Citigroup analyst Nobuyoshi Miura.

Nippon Sheet Glass Co. climbed 6.4 percent to 482 yen. Asia's second-largest glassmaker reported a 17 percent slide in operating profit yesterday as energy costs increased and sales dropped in North America and Japan. The company's results were better than anticipated, Shinya Yamada, an analyst at Credit Suisse Group, said in a note to clients, because its building and automotive products divisions stayed profitable due to restructuring efforts.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.