Asian stocks fall for 4th week as oil prices surge to record
Monday, 7 July 2008
Asian stocks fell for a fourth week, on concern record crude oil prices will slow global economic growth and erode earnings.
BHP Billiton Ltd, the world's largest mining company, led declines on concern metals demand will drop. Toyota Motor Corporation, the world's second-largest automaker, dropped after its US sales slumped last month. Posco led steelmakers lower on speculation lower vehicle sales will reduce demand for the metal.
"The world has definitely turned bearish and sentiment is very negative," said Prasad Patkar, who helps manage the equivalent of about $1.8 billion at Platypus Asset Management in Sydney. "The price of oil at this time is choking demand. That's what the world's equity markets are reacting to."
The MSCI Asia Pacific Index dropped 3.1 per cent to 132.78 in the past five days, with a gauge tracking material producers posting the biggest losses among 10 industry groups. The four weeks of declines were the most since a six-week losing streak that ended February 8.
Japan's Nikkei 225 Stock Average retreated 2.3 percent last week to 13,237.89. The measure has fallen for 12 straight days, the longest losing streak since 1954.
Malaysia's Kuala Lumpur Composite Index dropped 4.7 per cent last week to the lowest since March 6, 2007 on concern rising political tension will hurt investments. Trading on the country's stock market was suspended July 3 due to a systems failure.
The MSCI Asia Pacific has slumped 16 per cent this year amid mounting credit losses at the biggest financial institutions and as central banks across Asia raised borrowing costs to curb inflation. Finance ministers from the Group of Eight nations said last month surging food and fuel prices have replaced the credit squeeze as the biggest threat to the world economy.
BHP retreated 5.1 per cent to A$40.70 last week. Rio Tinto Group, the world's third-biggest mining company, declined 4.8 per cent to A$125.70. Jiangxi Copper Company, China's largest publicly traded producer of the metal, dropped 5.6 per cent to HK$14.26 in Hong Kong.
BHP, the world's sixth-largest producer of primary aluminium, also fell after Credit Suisse Group cut its earnings estimate for Alcoa Inc and Century Aluminium Company. Analysts said profits will be hurt by higher energy and materials costs and a lower average price for the metal.
BHP Billiton Ltd, the world's largest mining company, led declines on concern metals demand will drop. Toyota Motor Corporation, the world's second-largest automaker, dropped after its US sales slumped last month. Posco led steelmakers lower on speculation lower vehicle sales will reduce demand for the metal.
"The world has definitely turned bearish and sentiment is very negative," said Prasad Patkar, who helps manage the equivalent of about $1.8 billion at Platypus Asset Management in Sydney. "The price of oil at this time is choking demand. That's what the world's equity markets are reacting to."
The MSCI Asia Pacific Index dropped 3.1 per cent to 132.78 in the past five days, with a gauge tracking material producers posting the biggest losses among 10 industry groups. The four weeks of declines were the most since a six-week losing streak that ended February 8.
Japan's Nikkei 225 Stock Average retreated 2.3 percent last week to 13,237.89. The measure has fallen for 12 straight days, the longest losing streak since 1954.
Malaysia's Kuala Lumpur Composite Index dropped 4.7 per cent last week to the lowest since March 6, 2007 on concern rising political tension will hurt investments. Trading on the country's stock market was suspended July 3 due to a systems failure.
The MSCI Asia Pacific has slumped 16 per cent this year amid mounting credit losses at the biggest financial institutions and as central banks across Asia raised borrowing costs to curb inflation. Finance ministers from the Group of Eight nations said last month surging food and fuel prices have replaced the credit squeeze as the biggest threat to the world economy.
BHP retreated 5.1 per cent to A$40.70 last week. Rio Tinto Group, the world's third-biggest mining company, declined 4.8 per cent to A$125.70. Jiangxi Copper Company, China's largest publicly traded producer of the metal, dropped 5.6 per cent to HK$14.26 in Hong Kong.
BHP, the world's sixth-largest producer of primary aluminium, also fell after Credit Suisse Group cut its earnings estimate for Alcoa Inc and Century Aluminium Company. Analysts said profits will be hurt by higher energy and materials costs and a lower average price for the metal.