Australian Shares Fall on Oil; Japanese Stock Futures Advance

By Masaki Kondo

Nov. 4 (Bloomberg) -- Australian shares fell after oil dropped by almost $4 a barrel, clouding the earnings outlook for crude producers. Japanese stock futures advanced.

Woodside Petroleum Ltd., Australia's second-biggest oil producer, dropped 1.6 percent. U.S.-traded receipts of Mizuho Financial Group Inc., which slid 48 percent last month, soared 11 percent from the closing share price in Tokyo on Oct. 31. Those of Panasonic Corp. added 3.8 percent after the Nikkei newspaper reported it agreed to buy smaller rival Sanyo Electric Co.

Australia's S&P/ASX 200 Index slumped 2 percent to 4,138.20 as of 10:15 a.m. in Sydney. New Zealand's NZX 50 Index added 0.5 percent to 2,869.99 in Wellington.

Nikkei 225 Stock Average futures expiring in December closed at 9,080 in Chicago, higher than 8,450 in Osaka on Oct. 31 and 8,500 in Singapore. Japan's markets closed yesterday for a national holiday. On Oct. 31, the Nikkei lost 5 percent, capping a 24 percent drop for the month, the worst on record.

``An excessive decline the other day will prompt investors to buy in the market today,'' Mamoru Shimode, chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television. ``Though the stock market calmed down somewhat, we're in a tunnel with no exit in sight.''

Oil Demand

U.S. manufacturing contracted last month at the fastest pace in 26 years, the Institute for Supply Management said yesterday, signaling fuel consumption will decrease. Crude oil for December delivery dropped 5.8 percent to $63.91 a barrel in New York yesterday, having fallen 57 percent from a record on July 11.

U.S. auto sales tumbled in October, extending the longest slide in 17 years. Toyota Motor Corp. posted a 23 percent decline, while smaller rivals Honda Motor Co. and Nissan Motor Co. reported 25 percent and 33 percent falls, respectively.

Panasonic will hold a press conference on Nov. 7 to announce details of its plan to buy Sanyo, the Nikkei said, without saying where it obtained the information. Panasonic plans to make Sanyo a subsidiary by around April next year by buying preferred shares owned by Sumitomo Mitsui Banking Corp., Daiwa Securities SMBC Co. and Goldman Sachs Group Inc., the newspaper said.

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