Asian Stocks Decline as Exporters Drop; Woodside Leads Oil Stocks' Advance

Asian stocks declined, dragging the regional benchmark index lower for the first time in three days, as exporters dropped after a Federal Reserve official said interest rates made need to rise to curb inflation.

Nintendo Co., the maker of Wii game consoles that counts America as its biggest market, and Honda Motor Co., which gets about 44 percent of sales from North America, lost at least 1.4 percent. U.S. payroll reports will be released later today. Tokyo Electric Power Co., operator of a nuclear plant crippled after an earthquake and tsunami on March 11, slipped 3.7 percent as speculation grew the company will be nationalized. China Railway Group Ltd. (601390), the country’s No. 2 heavy construction firm, declined 5.6 percent after JPMorgan Chase & Co. cut its rating.

“Investors are sitting on the sidelines, waiting for the U.S. jobs data due out tonight,” said Manpreet Gill, Singapore- based Asian strategist at Barclays Wealth. “It’s premature to raise interest rates in the U.S. as the labor market is recovering very slowly.”

The MSCI Asia Pacific Index lost 0.1 percent to 135.61 as of 3:40 p.m. in Tokyo, paring losses of as much as 0.4 percent earlier. About the same number of stocks rose as fell in the index, which is set for a 1 percent advance this week. The gauge last week had its biggest weekly gain since November as Japan moved to stabilize nuclear reactors damaged by the earthquake, and as companies from Cnooc Ltd. (883) to Bank of China Ltd. reported earnings that surpassed estimates.

China, South Korea Data

Japan’s Nikkei 225 (NKY) Stock Average dropped 0.5 percent. Hong Kong’s Hang Seng Index gained 0.4 percent. China’s Shanghai Composite Index both advanced 1.1 percent as the nation’s manufacturing growth accelerated for the first time in four months, easing concern that monetary tightening may lead to a slowdown in the world’s second-biggest economy.

South Korea’s Kospi Index gained 0.7 percent to a record close as the country’s inflation climbed to the highest level in 29 months and exports reached a record in March, adding pressure for another interest-rate increase. Australia’s S&P/ASX 200 Index both climbed 0.5 percent. New Zealand’s NZX 50 Index increased 0.4 percent.

Futures on the Standard & Poor’s 500 Index were little changed today. The index fell 0.2 percent yesterday after Fed Bank of Minneapolis President Narayana Kocherlakota told the Wall Street Journal that policy makers may have to lift rates to fight inflation.

A Labor Department report today may show total U.S. non- farm payrolls rose 190,000 in March and the unemployment rate held at 8.9 percent, economists predict. The jobless rate fell below 9 percent in February for the first time in 22 months.

Exporters Drop

Nintendo dropped 1.4 percent to 22,160 yen in Tokyo. Honda Motor Co., Japan’s second-biggest carmaker, declined 2.4 percent to 3,050 yen. Li & Fung Ltd. (494), the largest supplier to Wal-Mart Stores Inc., declined 0.1 percent to HK$39.80 in Hong Kong.

Tokyo Electric Power Co., operator of the crippled Fukushima Dai-Ichi nuclear power plant, slipped 3.7 percent to 449 yen. Japan’s government hasn’t ruled out the possibility of investing in Tokyo Electric, Chief Cabinet Secretary Yukio Edano said.

The company faces claims of as much as 11 trillion yen ($131.5 billion), if the crisis lasts two years, that could lead to nationalization, a Bank of America Merrill Lynch report said this week.

China Railway Group dropped 5.6 percent to HK$4.74, the worst performer on the MSCI Asia Pacific Index. JPMorgan lowered its rating to “underweight” from “overweight.” China Railway Construction Corp., the country’s third-largest heavy construction company by market capitalization, dropped 4.5 percent to HK$7.72, its lowest level since October 2008, after also being downgraded to ‘underweight’ by JPMorgan.

Acer Inc. (2353), the world’s second-largest maker of personal computers, tumbled 4.8 percent to NT$57.1. The company said yesterday said Chief Executive Officer Gianfranco Lanci resigned after clashing with board members over the company’s strategy.

Energy Stocks Rally

Among stocks that advanced, Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, increased 1.3 percent to A$47.40 in Sydney. Royal Dutch Shell Plc might be holding talks with BHP Billiton Ltd., Mitsui & Co. Ltd. and Mitsubishi Corp. for a sale of its 24 percent stake in Woodside, the Australian Financial Review reported in its Street Talk column, without citing anyone.

Cnooc Ltd., China’s biggest offshore oil producer gained 2.6 percent to HK$20.10 in Hong Kong. Inpex Corp. (1605), Japan’s No.1 energy explorer jumped 4.3 percent to 658,000 yen.

Crude oil for May delivery climbed 2.4 percent to $106.72 a barrel yesterday, the highest settlement since Sept. 26, 2008, in New York amid concern the Libyan conflict will prolong production cuts.

Ping An Insurance (Group) Co., China’s second-largest insurer, jumped 4.1 percent to HK$82.10. Daiwa Securities Group Inc. raised its share-price forecast to HK$124.47 from HK$109.14 and maintained its “buy” rating.

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

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.