Wednesday, March 5, 2008

Asian Stocks Fall for Fifth Day; Japan's Nippon Steel Drops

Asian stocks fell for a fifth day, as Japanese steelmakers dropped after the country's capital spending slumped for a third straight quarter and crude oil's retreat from a record sent oil companies lower.

Nippon Steel Corp., the world's second-biggest steelmaker, dropped to the lowest since 2006 in Tokyo on concern the government will cut its estimate for Japan's economic growthSantos Ltd., Australia's No. 3 oil and gas explorer, led energy shares lower.

``Lower capital spending forced investors to face the reality that the earnings outlook for businesses is worsening,'' said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which manages the equivalent of $5.1 billion. ``The atmosphere has become increasingly unpleasant.'' The MSCI Asia Pacific Index fell 0.3 percent to 141.79 as of 11:59 a.m. in Tokyo, extending a four-day, 4.9 percent decline. The benchmark has slumped 10 percent this year on concern widening credit-market losses and a U.S. slowdown will weigh on global economic growth.

Japan's Nikkei 225 Stock Average fell 0.2 percent, after earlier gaining as much as 0.4 percent. About half of Asia's benchmarks fell.

South Korea's LG Electronics Inc., Asia's second-largest mobile-phone maker, advanced after BNP Paribas SA increased its earnings forecast. Taiwan Semiconductor Manufacturing Co. and Millea Holdings Inc. gained on brokerage upgrades.

U.S. stocks fell yesterday, led by financial and commodity shares, after Federal Reserve Chairman Ben S. Bernanke urged banks to forgive more late loans and oil, gold, and copper prices dropped from records.

Oil, Capital Spending

Nippon Steel declined 2.9 percent to 510 yen, set to close at its lowest since Nov. 29, 2006. Sumitomo Metal Industries Ltd., Japan's third-largest steelmaker, fell 2.9 percent to 407 yen.

Japanese capital spending excluding software fell 7.3 percent in the three months ended Dec. 31 from a year earlier, a third straight decline, the Ministry of Finance said today. The median estimate in a Bloomberg News survey of economists was for a 3.4 percent drop.

The Cabinet Office will lower its forecast for fourth- quarter gross domestic product on March 12, Richard Jerram, chief Japan economist at Macquarie Securities Ltd., said.

``The market is fresh out of any catalysts to spur buying,'' Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo, said in an interview with Bloomberg Television.

Komatsu Ltd., the world's second-largest maker of construction machinery plans, slipped 1.5 percent to 2,565 yen. Hitachi Construction Machinery Co., the No. 1 maker of giant excavators, retreated 2.2 percent to 2,615 yen.

Rating Changes

Santos fell 2.7 percent to A$12.04. Japan Petroleum Exploration Co., the country's second-biggest oil explorer, declined 1 percent to 7,040 yen. Cnooc Ltd., China's largest offshore oil producer, slipped 1 percent to HK$12.

Crude oil fell 2.9 percent yesterday to $99.52 a barrel in New York after reaching a high of $103.95 on March 3. Prices were recently at $99.66.

LG Electronics climbed 5.8 percent to 110,000 won. BNP Paribas lifted its estimate for the company's 2008 net income by 17 percent. Separately, Goldman, Sachs & Co. raised its share- price estimate by 7.9 percent, citing higher handset margins.

Taiwan Semiconductor, the world's largest maker of customized chips, gained 0.8 percent to NT$63.40. Lehman Brothers Holdings Inc. raised the stock to ``overweight'' from ``equal weight.'' Millea, Japan's biggest insurance company by value, added 1.6 percent to 3,860 yen. The stock was increased to ``equal weight'' from ``underweight'' at Morgan Stanley.

Cochlear, Asciano

Healthcare shares also advanced. Australia's Cochlear Ltd., the maker of the world's top-selling hearing implant, jumped 6.6 percent to A$54.83 after it was upgraded to ``overweight'' from ``neutral'' at JPMorgan Chase & Co.

Eisai Co., a Japanese drugmaker, gained 2 percent to 3,640 yen in Tokyo, advancing for the first time in five days. Mizuho Securities Co. raised its rating on the shares to ``hold'' from ``reduce'' while Lehman increased its recommendation to ``equal weight'' from ``underweight.''

In Australia, Asciano Ltd. plunged 11 percent to A$3.55, the second-biggest decliner on MSCI's Asian index. Macquarie Group Ltd. cut its rating on the nation's largest port and rail operator to ``underperform'' from ``outperform.''

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