Asian Stocks Drop For Second Day on Lehman Concern, Lower Oil

By Kyung Bok Cho and Shani Raja

Sept. 10 (Bloomberg) -- Asian stocks fell for a second day, led by financial and commodity companies, on concern Lehman Brothers Holdings Inc. will fail to raise capital and after oil traded below $100 a barrel in London.

Commonwealth Bank of Australia and Kookmin Bank both fell by more than 2 percent after Lehman's talks to sell a stake to Korea Development Bank broke down. BHP Billiton Ltd., the world's largest mining company, tumbled 5.6 percent, leading commodity stocks lower after crude oil and metal prices declined.

``All the worries about the banking sector have resurfaced and are shaking sentiment once again,'' said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $108 billion. ``You had oil prices falling quite sharply. While that's positive in the medium term, in the short-term it puts a lot of pressure on energy stocks.''

The MSCI Asia Pacific Index slipped 1.1 percent to 117.44 as of 9:11 a.m. in Tokyo, extending yesterday's 2.2 percent loss. Commodity and financial stocks accounted for about two-thirds of today's decline.

The Asian benchmark has tumbled 25 percent in 2008, compared with the 17 percent fall in the Standard & Poor's 500 Index. Global financial companies have posted losses in excess of $500 billion on a credit contraction, while slowing growth has damped demand for resources produced in the region.

Japan's Nikkei 225 Stock Average lost 1.3 percent to 12,241.17. Shares in Australia and South Korea also declined.

U.S. stocks slumped yesterday, with the S&P 500 falling 3.4 percent, the most since February 2007. In the previous session, the measure had gained the most in a month after the government's takeover of Fannie Mae and Freddie Mac.

To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.