Singapore Asian stocks fell, with the regional benchmark index headed for a one-week low, as raw-material suppliers dropped after commodities entered a bear market and reports on US home sales and manufacturing missed estimates.
BHP Billiton Ltd., the world's biggest mining company, slipped 2.1 per cent in Sydney. Samsung Electronics Co., the largest mobile-phone maker by sales, fell 3.7 per cent in Seoul. Mitsubishi UFJ Financial Group Inc., Japan's No. 1 lender, lost 1.1 per cent in Tokyo after 15 global banks were downgraded by Moody's Investors Service.
Indian equities retreated for the first time in four days as the rupee fell to a record, and after reports showed the US economic recovery is slowing.
Reliance Industries Ltd., operator of the world’s largest refining complex, fell to a two-week low. Hindalco Industries Ltd., the aluminium maker that controls US-based Novelis Inc., dropped the most in five weeks. The BSE India Sensitive Index lost 0.4 per cent to 16,967.57, according to preliminary closing prices, paring the weekly advance to 0.1 per cent.
The MSCI Asia Pacific Index fell 1.2 per cent to 114.18 in Tokyo, its lowest since June 15. About three shares declined for each that rose in the gauge, which is erasing last week's advance. More than $5 trillion (Dh18.3 trillion) has been wiped from global equities since a March peak amid slowing economic growth in the US and China, and a spreading European debt crisis that pushed Spain's borrowing costs to a record.
"There will be further downside," said Peter Elston, Singapore-based head of Asia-Pacific strategy and asset allocation at Aberdeen Asset Management, which oversees about $270 billion. "Things are still getting worse. When you have an essentially weak private sector, you're relying on the government to step in and support things. You're seeing a gradual weakening of the ability of governments to step in."
Japan's Nikkei 225 Stock Average lost 0.3 per cent, while South Korea's Kospi Index sank 2.2 per cent. Australia's S&P/ASX 200 Index slipped 1 per cent. Hong Kong's Hang Seng Index dropped 1.4 per cent. Markets in mainland China were closed today for a holiday. Trading volumes across Asia were below the 30-day average, according to data compiled by Bloomberg News.
Bear Market
Resources and energy companies led losses among the 10 industry groups in the MSCI Asia Pacific Index. The Thomson Reuters/Jefferies CRB Index of raw materials retreated 2.1 per cent yesterday. The S&P GSCI commodities gauge slid to the lowest level since 2010 yesterday and is down 22 per cent from a February peak, entering a so-called bear market.
BHP Billiton fell 2.1 per cent to A$31.52 in Sydney. Rio Tinto Group, the world's third-biggest mining company by market value, slid 1.6 per cent to A$56.02. Glencore International Plc, the world's largest publicly traded commodities supplier, slipped 2.7 per cent to HK$38.40 in Hong Kong.
Bridgestone Corp. dropped 1.2 per cent to 1,755 yen in Tokyo after the world's biggest maker of tires said it may extend output cuts in the second half as Europe's debt crisis and China's slowdown curb demand.
US Economy
Futures on the Standard & Poor's 500 Index added 0.4 per cent today. The gauge declined 2.2 per cent in New York yesterday as manufacturing in the Philadelphia region shrank to the lowest level since August and sales of previously owned homes in May fell, adding to evidence US economic growth is weakening.
Exporters to the US declined. Samsung Electronics fell 3.7 per cent to 1.182 million won in Seoul. Li & Fung Ltd., a supplier of toys and clothes to retailers including Wal-Mart Stores Inc., sank 5.5 per cent to HK$14.48 in Hong Kong. James Hardie Industries SE, a building-materials supplier that counts the US as its biggest market, dropped 1.7 per cent to A$7.57 in Sydney.
Financial stocks dropped after Moody's cut credit ratings for Credit Suisse Group AG, Morgan Stanley and 13 other banks. The lenders have "significant exposure to the volatility and risk of outsized losses inherent to capital-markets activities," Moody's Global Banking Managing Director Greg Bauer said in a statement.
HSBC, Westpac
Mitsubishi UFJ declined 1.1 per cent to 368 yen in Tokyo. HSBC Holdings Plc, Europe's biggest lender by market value, slid 1.2 per cent to HK$67.45 in Hong Kong. Westpac Banking Corp., Australia's second-largest lender by market value, fell 1.1 per cent to A$20.75 in Sydney.
The Asian benchmark stock gauge slumped 10 per cent from its peak on February 29 through yesterday, dragging shares on the index to 1.2 times book value. That compares with 2.1 times for the S&P 500 and 1.4 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. A number below one means companies can be bought for less than value of their assets.
