Asian Stocks Drop as Commodities Prices Slump; Posco, BHP Fall

By Patrick Rial and Masaki Kondo

Oct. 23 (Bloomberg) -- Asian stocks slumped, sending the region's benchmark index to the lowest level in four years, after commodity prices tumbled on concern a global economic slowdown is reducing demand for raw materials.

Posco retreated 7.8 percent after global steel production dropped last month. BHP Billiton Ltd. and Rio Tinto Group plunged more than 8 percent after European regulators said a takeover of Rio by BHP may break antitrust rules, people close to the case said. Australia & New Zealand Banking Group Ltd. lost 4.8 percent after profit fell by a third.

The MSCI Asia Pacific Index lost 3.2 percent to 85 as of 9:28 a.m. in Tokyo, set for the lowest level since May 2004. The gauge has plunged 46 percent this year.

Japan's Nikkei 225 Stock Average lost 5.2 percent to 8,227.75, poised for its weakest close since May 2003. Equity indexes in Australia, New Zealand and South Korea also tumbled.

U.S. stocks slumped yesterday as the Standard & Poor's 500 Index lost 6.1 percent to the lowest level since April 2003.

Crude oil for December delivery dropped 7.5 percent to $66.75 a barrel in New York yesterday, the lowest settlement since June 2007 as an economic slowdown reduced fuel consumption. Copper futures declined to as much as $1.823, a three-year low, while gold sank 4.3 percent.

The Reuters/Jefferies CRB Index of 19 raw materials plunged as much as 3.3 percent to 269.48, the lowest since Sept. 8, 2004. A measure of six metals traded on the London Metal Exchange fell 5.9 percent, with copper dropping 7.6 percent.

Commodities Slump

BHP lost 8 percent to A$24.91. Rio Tinto declined 15 percent to A$66.97. Woodside Petroleum Ltd., operator of Australia's A$25 billion ($20 billion) North West Shelf liquefied natural gas venture, fell 3 percent to A$39.64.

European Union regulators told lawyers for BHP that its $76 billion hostile bid for Rio Tinto Group may break antitrust rules, two people close to the case said.

Second-half profit at ANZ Banking, the nation's third- largest lender, fell 35 percent to A$1.36 billion ($911 million) as provisions for delinquent loans surged. ANZ dropped 4.8 percent to A$18.09.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net;