Asian Stocks Drop as U.S. Unemployment Jumps; Woodside Falls

By Shani Raja

Jan. 12 (Bloomberg) -- Asian stocks dropped for a third day, led by commodity producers, on concern an increase in U.S. unemployment signals a worsening global recession.

Woodside Petroleum Ltd. slipped 2 percent as crude oil fell for a fourth day. U.S. employers cut 524,000 positions in December, capping the worst year for firings since 1945. Rio Tinto Group slumped 5.5 percent after Deutsche Bank AG downgraded world’s third-biggest mining company to “hold” from “buy”. Hyundai Motor Co., South Korea’s biggest automaker, slid 1.1 percent after saying it plans to cut domestic production.

“The global economy is continuing to deteriorate,” said Rob Patterson, who manages about $2 billion at Argo Investments Ltd. in Adelaide. “If the U.S. economy is slowing, it means they’re importing less from countries like China, and that China is buying fewer commodities. It’s not helpful to anyone.”

The MSCI AC Asia Pacific excluding Japan Index fell 1.2 percent to 244.42 at 9:06 a.m. in Hong Kong, extending a two-day, 3.2 percent loss. All 10 industry groups declined. The index tumbled 53 percent in 2008, the biggest annual drop in its two- decade history.

Japan’s markets are closed for a holiday. Australia’s S&P/ASX 200 Index slipped 1.7 percent, while South Korea’s Kospi Index dropped 1.2 percent.

The Standard & Poor’s 500 Index sank 2.1 percent on Jan. 9, capping the worst week since November. The unemployment rate climbed to 7.2 percent in December, the Labor Department said, exceeding forecasts from economists polled by Bloomberg. The nation lost 2.589 million jobs last year, just shy of the 2.75 million drop at the end of World War II.

President-elect Barack Obama said in an ABC interview on the weekend that reviving the U.S. economy will require scaling back on his campaign promises and personal sacrifice from all Americans.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.