Most Asian stocks fell, sending the region’s benchmark index to its worst first half in 16 years, on speculation rising commodity prices will erode earnings and as a stronger yen hurt Japan’s electronics exporters.
Samsung Electronics Co led technology shares lower after Lehman Brothers Holdings Inc cut its share-price target and crude oil climbed above US$142, close to a record. Sony Corp declined to the lowest in almost two months after the yen rose to a three-week high. BHP Billiton Ltd, the world’s largest mining company, led gains after oil and metals advanced.
“Oil at US$150 is in sight, steel is rising and there’s a limit to how much manufacturers can pass on the higher costs to their customers,” said Hitoshi Yamamoto, chief executive officer of Tokyo-based Fortis Asset Management Japan Co, which manages US$5.5 billion. “Commodities and related stocks are so strong, it’s difficult to buy anything else.”
The MSCI Asia-Pacific Index added 0.1 percent to 137.14 as of 4:04pm in Tokyo as five shares fell for every four that rose. The benchmark is on course for a first-half loss of 13 percent, the worst performance since a 23 percent decline in the same period of 1992, when Japan’s asset bubble was deflating.
China’s CSI 300 Index lost 0.7 percent yesterday, poised for a 23 percent rout since the end of May and its worst month on record. Japan’s Nikkei 225 Stock Average dropped 0.5 percent to 13,481.38. Most indexes in the region fell after Citigroup Inc analysts said Asian stock markets would extend declines in the second half as a slowing global economy dampens earnings growth.
“Uncertainty over the outlook for the US economy is rising again,” said Hiroshi Morikawa, a senior strategist at Tokyo-based MU Investments Co, which manages the equivalent of US$14 billion. “Investors are caught by doubt and fear.”
Samsung, Asia’s biggest maker of chips, mobile phones and flat panels, dropped 2.8 percent to 625,000 won, its lowest close March 31. Hynix Semiconductor Inc, the world’s second-largest memory-chip maker, lost 3.7 percent to 25,000 won.
Lehman cut its share-price forecast for Samsung by 15 percent and lowered its target for Hynix by 11 percent, citing a slowdown in the memory market.
Sony, the world’s No. 2 consumer-electronics maker, fell 2.5 percent to ¥4,720. Sony Ericsson Mobile Communications Ltd, Sony’s mobile-phone venture with Ericsson AB, said on Friday declining sales and delays to new products wiped out second-quarter earnings.
Sony also declined after the yen strengthened to as much as ¥105.76 against the US dollar from ¥107.09 at the close of stock trading in Tokyo on Friday. Gains in the Japanese currency reduce the value of repatriated overseas sales.
The MSCI regional index has lost 8.7 percent this month, resuming its decline this year, as record oil worsened the outlook for global economic growth and concern grew that credit-market losses may widen.
The benchmark is on track for its worst monthly drop since January, when it sank 9 percent. Stock-market losses worldwide this year have wiped out about US$9.2 trillion, data compiled by Bloomberg showed.
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