Asian Commodity Shares Drop on Oil, Metal Prices; Samsung Rises

By Patrick Rial and Shani Raja

Dec. 19 (Bloomberg) -- Asian commodity stocks slumped after crude fell below $36 a barrel and copper dropped to a four-year low, countering advances by technology shares as computer-memory chip prices rallied.

BHP Billiton Ltd., the world’s biggest mining company, sank 4.6 percent in Sydney, and Inpex Corp., Japan’s largest oil explorer, lost 1.9 percent. Panasonic Corp., which gets half its sales from outside Japan, rose 2.1 percent after the yen fell from a 13-year high. Samsung Electronics Co., the world’s biggest computer-memory maker, gained 3.3 percent after the benchmark gauge of memory-chip prices climbed for the first time in six weeks.

The MSCI Asia Pacific Index retreated 0.1 percent to 90.26 as of 9:58 a.m. in Tokyo, with three stocks advancing for every two that declined. The gauge has climbed 7.1 percent this week, and has gained 9.3 percent in December, putting it on course for its first monthly advance since April.

The MSCI Asia is still down 43 percent for the year, set for its worst annual performance in the benchmark’s two-decade history as the global financial crisis dragged the world’s biggest economies into recession. Analysts have slashed their average earnings-per-share estimate for companies on the index by 26 percent since the beginning of the year, data compiled by Bloomberg show.

Japan’s Nikkei 225 Stock Average gained 0.1 percent to 8,679.08, reversing an earlier 0.8 percent drop. Hitachi Construction Machinery Co., the world’s biggest maker of giant excavators, fell 2.1 percent after a newspaper said the company will scale back production.

Bank of Japan

Shares fell in Australia and New Zealand, and gained in South Korea. U.S. stocks slipped yesterday, with the Standard & Poor’s 500 Index declining 2.1 percent as S&P lowered General Electric Co.’s debt outlook.

The global recession has hurt commodities demand, creating a glut of oil that has driven prices down 75 percent from a record $147.27 on July 11. Crude oil futures declined 9.6 percent to $36.22 a barrel in New York yesterday, the lowest settlement since June 2004.

Today, the Bank of Japan will conclude its two-day policy meeting after its U.S. counterpart slashed its benchmark rate this week to as low as zero for the first time in its history.

Jiji Press and the Mainichi newspaper reported Japan’s central bank is likely to leave its interest rate unchanged, while traders see a 50 percent chance the BOJ will lower borrowing costs from 0.3 percent, according to calculations by JPMorgan Chase & Co. using overnight interest-rate swaps.

To contact the reporters for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.