Asian Stocks Head for Third Weekly Decline

Asian stocks fell, set for a third weekly decline, as lower oil and gold prices dragged down commodity shares and Europe joined Japan in reporting an economic contraction.

Cnooc Ltd., China's biggest offshore oil producer, slumped 4.3 percent in Hong Kong. Newcrest Mining Ltd., Australia's No. 1 gold producer, retreated 2.5 percent as gold dropped below $800 an ounce. Fund manager Babcock & Brown Ltd. completed a five-day, 35 percent plunge in Sydney after reporting lower profit.

The MSCI Asia Pacific Index lost 0.6 percent to 124.81 as of 7:27 p.m. in Tokyo, its lowest since Aug. 7, 2006. The measure declined 1.8 percent this week, taking this year's drop to 21 percent as soaring fuel and food prices threatened consumer spending and corporate profits, while writedowns and credit losses at financial companies topped $500 billion.

Japan's Nikkei 225 Stock Average gained 0.5 percent to 13,019.41. Most Asian markets open for trading fell, with South Korea and India shut for holidays.

Toyota, Asia's largest automaker, rose after saying the U.S. truck market remains ``viable.'' Mitsui O.S.K. Lines Ltd. led gains among shipping companies after commodity cargo fees increased the most since Jan. 30.

U.S. stocks rose for the first time in three days yesterday after a trade group loosened restrictions on Fannie Mae and Freddie Mac to help revive the mortgage industry. Standard & Poor's 500 Index futures gained 0.2 percent today.

Oil in New York dropped as much as 1.4 percent to $113.36 a barrel today, after falling 0.9 percent yesterday. Prices have tumbled 23 percent from the record $147.27 reached on July 11.

Europe's gross domestic product fell 0.2 percent in the second quarter from the first, the European Union statistics office in Luxembourg said yesterday. The Bank of England this week cut its growth forecast for the U.K., Japan's economy contracted 2.4 percent last quarter, and China yesterday said industrial production grew at the slowest pace in 17 months.

Shipping lines advanced as the Baltic Dry Index, which tracks transport costs of raw commodities on international trade routes, surged 4.6 percent, the biggest gain since Jan. 30. The benchmark index is down 17 percent this year.

Asian Stocks Head for Third Weekly Decline, Bloomberg
8/15/2008 6:34:47 AM