Asian Stocks Decline for Second Day; Cnooc, Bangkok Bank Drop

By Chen Shiyin and Chua Kong Ho
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Sept. 2 (Bloomberg) -- Asian stocks declined for a second day, led by commodity and technology companies, after crude oil prices slumped to a four-month low and on signs of political turmoil in Japan and Thailand.

Inpex Holdings Inc., Japan's biggest oil explorer, and Cnooc Ltd. both dropped more than 5 percent. Canon Inc. lost 2.7 percent in Tokyo as Japan's Prime Minister Yasuo Fukuda resigned after less than a year in office. Bangkok Bank Pcl retreated 4.3 percent after Prime Minister Samak Sundaravej declared a state of emergency. Woori Finance Holdings Co. fell 6.3 percent as South Korea's government failed to allay fears of an economic slowdown.

``It's been a painful last couple of months,'' said Ivan Leung, Hong Kong-based chief investment strategist at JPMorgan Private Bank, which oversees $400 billion in assets globally. ``The economic uncertainty means there'll be massive pressure on commodity stocks in the short term.''

The MSCI Asia Pacific Index declined 1.4 percent to 121.98 as of 4:33 p.m. in Tokyo. The measure lost 2.1 percent yesterday and has tumbled 23 percent this year as global growth slowed and the world's largest financial companies reported credit-related writedowns and losses of more than $500 billion.

Japan's Nikkei 225 Stock Average fell 1.8 percent to 12,609.47, the lowest since March 31. Thailand's SET Index slumped 2 percent, while South Korea's Kospi index lost 0.5 percent, extending yesterday's 4.1 percent drop.

Australia's S&P/ASX 200 Index erased gains of as much as 1.2 percent after the central bank raised its benchmark interest rate for the first time since 2001. Most stock indexes fell in Asia.

Rating Cuts

Bridgestone Corp., the world's largest tiremaker by sales, climbed in Tokyo after oil prices retreated and Nikko Citigroup Ltd. upgraded the shares. Hon Hai Precision Industry Co., the world's largest contract manufacturer, tumbled in Taipei after UBS AG cut the stock's rating.

U.S. markets were closed yesterday for the Labor Day holiday. Standard & Poor's 500 Index futures were down 0.3 percent today.

Inpex, Japan's largest oil explorer, slumped 6.7 percent to 1.067 million yen, the most since Aug. 1. Cnooc, China's biggest offshore oil company, lost 6.7 percent to HK$11.20 in Hong Kong.

Oil futures slumped as much as 6.2 percent to $108.33 a barrel in New York after the weakening of Hurricane Gustav eased concern of major damage to rigs and refineries.

Metal Prices Drop

Other raw-material prices also retreated, with a measure of six metals on the London Metal Exchange falling 2.4 percent yesterday, the lowest in two weeks. Zinc slipped 1.7 percent, copper 2.7 percent and nickel 4.6 percent. BHP Billiton Ltd., the world's No. 1 mining company, lost 4.4 percent to A$39.29, its largest drop since Aug. 5. Rio Tinto Group, the third-biggest, fell 4 percent to A$119.97.

Canon, the world's largest digital-camera maker, fell 130 yen to 4,690. Sony Corp., the second-biggest consumer-electronics maker, dropped 1.7 percent to 4,070. Mitsubishi UFJ Financial Group Inc., Japan's biggest bank by market value, declined 1.6 percent to 811 yen.

Fukuda, 72, stepped down yesterday after 11 months in office marked by low approval ratings. Taro Aso, a lawmaker in Fukuda's ruling Liberal Democratic Party, is favored in polls to become the next prime minister.

``We can't emerge from this policy stagnation under the current political split,'' said Hiroshi Arano, who helps oversee $26 billion at Mizuho Asset Management Co. in Tokyo. ``It's clear that investors have been frustrated.''

Thailand's Turmoil

Bangkok Bank, the country's largest bank, fell 5 baht to 112. Siam Commercial Bank Pcl, the third-biggest, declined 2 percent to 75.5 baht.

Thailand's SET Index dropped to the lowest since Feb. 1, 2007 after the prime minister declared a state of emergency following clashes in Bangkok between pro- and anti-government factions that left one dead and 43 injured.

Woori Finance, which controls South Korea's second-biggest bank, fell 850 won to 12,600 won. The shares plunged 6.9 percent yesterday. Shinhan Financial, which controls the nation's third- biggest bank, dropped 1 percent to 47,550, extending yesterday's 3.6 percent retreat.

The Kospi index yesterday lost 4.1 percent and the won weakened below 1,100 a dollar for the first time in almost four years on concern Asia's fourth-biggest economy will weaken. The won fell to its weakest since 2005 today.

`Teetering' Economies

Stock and currency declines prompted Vice Finance Minister Kim Dong Soo to say that the nation will take ``stern action'' to arrest the slump in the won.

``Korea is considered as a global, cyclical economy and as the world economies are teetering toward a recession scenario, that causes concern for investors,'' said Khiem Do, who helps oversee about $11 billion of Asian equities at Baring Asset Management (Asia) Ltd. in Hong Kong. ``We have been underweight Korea in our regional funds.''

Bridgestone climbed 1.7 percent to 1,848 yen after oil prices retreated and Nikko Citigroup Ltd. upgraded the shares to ``neutral'' from ``sell,'' citing stabilizing costs. Petroleum accounts for at least half the raw-material cost of a tire, according to analysts.

Hon Hai, which makes iPods for Apple Inc. and Wii game consoles for Nintendo Co., fell 5.4 percent to NT$141. UBS analysts cut their recommendation to ``neutral'' from ``buy'' after Hon Hai said on Aug. 29 that second-quarter profit slipped 24 percent, its first decline in seven years.

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