Asian Stocks Drop 2nd Day on U.S. Data, Commodity Prices

By Jonathan Burgos and Adam Haigh - May 4, 2012 8:22 AM GMT+0700

Asian stocks fell for a second day, with a regional benchmark index paring its weekly advance, as U.S. service industries expanded less than forecast and falling commodity prices weakened the earnings outlook for exporters and raw-material producers.

Samsung Electronics Co. (005930), the world’s No. 1 mobile-phone maker by sales, fell 1.9 percent in Seoul. BHP Billiton Ltd., the world’s biggest mining company, lost 1 percent in Sydney. Gloucester Coal Ltd. sank 2 percent on speculation the price of fuel used in power stations may not recover from an 18-month low. Ascendas Real Estate Investment Trust slid 4.3 percent in Singapore after the industrial landlord raised S$298.5 million ($240 million) by selling shares at a discount.

“The U.S. data was quite disappointing and it seems like it’s now catching up with the rest of the world,” said Stan Shamu, a market strategist at IG Markets in Melbourne, a provider of trading services in stocks, bonds and commodities. “Commodities prices have weakened, so the likes of BHP will be negatively affected.”

The MSCI Asia Pacific Excluding Japan Index dropped 0.4 percent to 440.68 as of 9:17 a.m. in Hong Kong, with about three shares sliding for every two that rose. The regional gauge is heading for its first weekly advance in five weeks following moves to stimulate economic growth in Australia and amid signs manufacturing output in U.S. and China is improving.

Australia’s S&P/ASX 200 Index (AS51) decreased 0.5 percent, while South Korea’s Kospi Index dropped 0.6 percent. Singapore’s Straits Times Index lost 0.3 percent. Japanese markets are closed today for a holiday.

U.S. Economy

Futures on the Standard & Poor’s 500 Index were little changed today. The gauge declined 0.8 percent in New York yesterday as U.S. service industries grew at a slower pace than projected in April.

Exporters declined as the services industry data, combined with a report that showed consumer confidence among Americans fell to a two-month low last week, added to signs the recovery of the world’s largest economy may be faltering.

The reports overshadowed data showing jobless claims fell to 365,000 in the week ended April 28, a one-month low. A Labor Department report today may say the U.S. added 160,000 jobs in April, compared with a gain of 120,000 the previous month, according to a Bloomberg survey of economists.

Raw-material producers posted the biggest decline among the 10 industry groups in the MSCI Asia Pacific Excluding Japan Index. (MXAPJ) The London Metal Exchange Index of prices for six industrial metals including copper and aluminum fell 0.9 percent yesterday. The Thomson Reuters/Jefferies CRB Index of raw materials also retreated 0.9 percent. Oil traded near a two-week low.

The MSCI Asia Pacific Excluding Japan Index rose 12.6 percent this year through yesterday, compared with a 10.7 percent gain by the S&P 500 and a 5.3 percent advance by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.7 times estimated earnings on average, compared with a multiple of 13.2 for the S&P 500 and 10.8 times for the Stoxx 600.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net