Asian stocks fell for the third time in four days, after the world's two largest copper producers said China's plans to curb its economy will lower demand for the metal.
BHP Billiton, the world's largest mining company, sank 2.4 per cent after the comments from Codelco and Freeport-McMoran Copper & Gold Inc.'s chief executive officers dragged metal prices lower. Baoshan Iron & Steel Co. fell 2.2 per cent after Shanghai Securities News said the company will cut its prices. Fuji Heavy Industries, which makes Subaru cars, surged 6.2 per cent after the Nikkei newspaper said the company will earn a record profit in North America.
The MSCI Asia Pacific Index lost 0.4 per cent to 113.17. About three stocks fell for every two that rose. The gauge has lost 12 per cent from its high this year on April 15 on concern Europe's debt crisis and Chinese measures to cool its property market will hurt global economic growth.
“Chinese economic growth remains a significant risk in the eyes of investors, particularly given the uncertainty surrounding other regions, particularly the euro-zone,” said Tim Schroeders, who helps manage about $US1.1 billion at Pengana Capital Ltd. in Melbourne. “The political situation in Japan adds to uncertainty for investors in the near term.”
The Nikkei 225 Stock Average lost 0.2 per cent in Tokyo where the Democratic Party of Japan chose Naoto Kan as its leader, making it likely he'll be officially named prime minister after Yukio Hatoyama announced his resignation two days ago.
South Korean growth
Mining companies dragged Australia's S&P/ASX 200 Index down by 1.1 per cent. China's Shanghai Composite Index dropped 0.2 per cent. The Kospi index added 0.1 per cent in Seoul, where the central bank said the country's economy expanded at a faster pace than initially estimated last quarter.
Futures on the Standard & Poor's 500 Index lost 0.2 per cent today. The index rose 0.4 per cent yesterday on speculation a jobs report due later today will bolster optimism in the economy and overshadow concern about slowing growth in China.
The copper market will be “volatile” for as much as another year after China took measures to cool its property market, Codelco Chief Executive Officer Diego Hernandez said yesterday in an interview. The Asian nation is a “risk to the world's market place in the near term,” Freeport-McMoran Copper & Gold Inc. CEO Richard Adkerson said in an interview.
Baoshan Steel
BHP sank 2.4 per cent to $37.82 in Sydney, while Rio Tinto Group, the world's third-largest mining company, lost 2.2 per cent to $67.56 after Hernandez and Adkerson's comments dragged copper futures in New York down by 3.1 per cent.
Baoshan Iron & Steel, the listed unit of China's second- biggest steelmaker, slid 2.2 per cent to 6.14 yuan. The company will lower its prices in July, the Shanghai Securities News reported today, citing a company pricing statement it obtained.
Chinese policy makers are trimming stimulus measures this year after a $US1.4 trillion lending binge revived growth in 2009 Officials are targeting a 22 per cent reduction in new loans and have sold bills and raised banks' reserve requirements to suck money out of the financial system.
In Tokyo, Fuji Heavy climbed 6.2 per cent to 562 yen. The company is forecast to generate 45 billion yen ($US487 million) operating profit in North America for the year ending March 2011, an increase of about 40 per cent, the Nikkei said.
Bloomberg