Asian Stocks Decline as Commodity Prices, Shipping Rates Drop

By Jonathan Burgos

July 6 (Bloomberg) -- Asian stocks declined as commodities prices and shipping rates dropped amid concern the global economic recovery will falter.

BHP Billiton Ltd., the world’s biggest mining company, dropped 1.7 percent after metals prices fell. Mitsui O.S.K. Lines Ltd., Japan’s second-biggest shipping line by sales, sank 2.4 percent after shipping rates slumped 4.1 percent on July 3 in London. Inpex Corp., Japan’s largest oil explorer, fell 2 percent after crude oil prices declined.

“There’s a tug of war going on as the focus shifts to the outlook for individual companies,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. “Right now, the market is waiting for some data to provide it with direction.”

The MSCI Asia Pacific Index lost 0.1 percent to 102.74 as of 9:50 a.m. in Tokyo. The gauge has slipped 2.4 percent since climbing to an eight-month high on June 12 as economic data including rising U.S. unemployment and new share issuances have damped enthusiasm for equities. The measure has rallied 45 percent since falling to a more than five-year low on March 9.

Japan’s Nikkei 225 Stock Average slid 0.6 percent to 9,755.83. Australia’s S&P/ASX 200 Index lost 0.8 percent and South Korea’s Kospi gained 0.9 percent.

Commodity Demand

In New York, markets were closed for the July 4 holiday. U.S. Vice President Joe Biden said the Obama administration “misread the economy” when it forecast unemployment would peak at 8 percent if Congress enacted a $787 billion fiscal stimulus plan. Biden, appearing on the ABC News program “This Week,” said that in crafting its initial economic policies, the Obama administration followed consensus views of the severity of the crisis. Unemployment reached 9.5 percent last month, the Labor Department said July 2.

BHP Billiton lost 1.7 percent to A$32.86. Rio Tinto Group Ltd., the world’s third largest mining company, slipped 1.2 percent to A$49.02. Mitsubishi Corp., which gets almost half of its sales from commodities, dropped 1.1 percent to 1,714 yen. A gauge of six metals traded in London fell 1.3 percent on July 3.

Mitsui O.S.K. dropped 2.4 percent to 579 yen. The Baltic Dry index finished a second-straight weekly loss last week amid mounting concern China’s demand for commodities such as iron ore will slow. The index has tumbled 18 percent in the last month.

Inpex dropped 2 percent to 720,000 yen. Crude oil fell as much as 2.7 percent in trading today.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.