21 Oct 2009
Oct. 21 (Bloomberg) -- Asian stocks declined, led by materials and technology companies, on declines in commodity prices and worse-than-forecast U.S. housing starts. Treasuries and the dollar advanced.BHP Billiton Ltd. sank 1.1 percent as a gauge of metals in London fell from a two-month high. Nissan Motor Co., which counts North America as its biggest market, lost 1.6 percent in Tokyo. Samsung Electronics Co. dropped 1.9 percent in Seoul after AT&T Inc. sued the company and other display makers for collusion to fix prices.
The MSCI Asia Pacific Index lost 0.7 percent to 120.41 as of 12:10 p.m. Tokyo time. The gauge has surged 71 percent from a five-year low on March 9 amid signs the global economy is rebounding from the worst slowdown since World War II.
"The economic recovery is still intact, but data is showing that the pace of the rebound has started to slacken," said Kiyoshi Ishigane, a strategist at Mitsubishi UFJ Asset Management Co., which oversees about $56 billion. "Company profits are gradually returning, but we need to discern whether the stock price already reflects the improvement or not."
Japan's Nikkei 225 Stock Average fell 0.3 percent, while Australia's S&P/ASX 200 Index dropped 0.3 percent. South Korea's Kospi Index declined 0.5 percent.
Among stocks that rose today, Toshiba Corp., the world's No. 2 maker of flash memory chips, gained 3.1 percent after CLSA Asia-Pacific Markets recommended the shares.
Futures on the Standard & Poor's 500 Index dropped 0.2 percent. The gauge sank 0.6 percent yesterday after a Commerce Department report showed housing starts rose 0.5 percent in September, missing economists' estimates.
Treasuries, Dollar
Treasuries gained and the dollar strengthened against the euro amid lower demand for higher-yielding assets. The yield on 10-year Treasuries fell two basis points to 3.32 percent. The dollar traded at $1.4898 per euro from $1.4945 in New York yesterday, when it touched $1.4994, the weakest level since August 2008.
Nissan, Japan's No. 3 automaker, fell 1.6 percent to 662 yen. Shin-Etsu Chemical Co., which made 20 percent of its sales last year in North America, sank 1.3 percent to 5,350 yen. James Hardie Industries NV, the biggest seller of home siding in the U.S., lost 0.7 percent to A$7.52 in Sydney.
Better-than-estimated economic and earnings figures have driven the MSCI Asia Pacific Index's seven-month rally. Stocks in the gauge are priced at 23 times estimated earnings, compared with an average of 18 times in the past three years.
Strengthening Economy
This month, reports showed the U.S. service industries grew for the first time in a year and an export decline slowed in China. Amid signs the global economy is strengthening, Australia's central bank unexpectedly raised its benchmark rate on Oct. 6 and has signaled further increases in coming months.
BHP, the world's largest mining company, dropped 1.1 percent to A$39.49. Crude oil for December delivery fell for the first time in nine days yesterday, losing 0.5 percent to $79.09 a barrel in New York. The London Metals Index, a measure of six metals including copper and zinc, fell 1 percent, retreating from a two-month high.
Samsung, the world's biggest maker of liquid-crystal displays, lost 1.9 percent to 738,000 won. LG Display Co. dropped 1.7 percent to 32,350 won, while Taiwan's AU Optronics Corp. slid 1.5 percent to NT$32.20.
AT&T, the biggest U.S. phone carrier, filed the complaint in federal court, claiming the companies were among those that "formed an international cartel illegally to restrict competition in the United States in the market for LCD panels."
‘Knee-Jerk Reaction'
"The material impact on the panel stocks may be limited, since the lawsuit can drag on for several years," said Bevan Yeh, who helps manage about $1.2 billion at Prudential Financial Securities Investment Trust Enterprise in Taipei. "It's inevitable that there will be some knee-jerk reaction."
Toshiba gained 3.1 percent to 541 yen in Tokyo. CLSA raised its investment rating on the stock to "buy" from "underperform," citing rebounding demand for flash memory.
After the close of U.S. trading yesterday, SanDisk Corp., the biggest maker of flash-memory cards used in digital cameras and mobile phones, said fourth-quarter sales will probably be between $1.1 billion and $1.2 billion, compared with analysts' estimates for $835.4 million.
