Dec. 4 (Bloomberg) -- Asian stocks and oil dipped after an unexpected drop in U.S. services industries damped demand for risky assets and lifted concerns that economic growth may slow.
The MSCI Asia Pacific Index fell 0.12 percent to 121.47 as of 4:30 p.m. in Tokyo, after yesterday climbing to the highest level since Sept. 1, 2008. The gauge has advanced 6.6 percent this week and 72 percent from a five-year low on March 9. Japan’s Topix climbed every day this week, bringing its gains to 9.7 percent, the steepest weekly advance since August 1992. Futures for the Dow Jones Euro Stoxx 50 fell 0.42 percent at 7:30 a.m. London time. Crude oil futures fell for a third day, off 0.73 percent to $75.90 a barrel.
The Institute for Supply Management’s index of non- manufacturing businesses in the U.S. -- almost 90 percent of the world’s largest economy -- fell to 48.7 from 50.6 in October. A reading below 50 indicates a contraction. A report on U.S. unemployment today may show the rate remain at a 26-year high of 10.2 percent, according to a Bloomberg survey.
“The reading was weaker than expected and that raised some investor anxiety ahead of the employment report,” said Toby Hassall, a research analyst with CWA Global Markets Pty in Sydney. “Policy makers have indicated they see the recovery as being very uneven, and I expect the unemployment rate to stay elevated for an extended period.”
James Hardie Industries NV, which gets more than 75 percent of its revenue from North America, sank 3.8 percent to A$8.18. Li & Fung Ltd., the biggest supplier of clothes and toys to Wal- Mart Stores Inc., fell 4.3 percent to HK$33.05 in Hong Kong.
Asia Equity Movers
Rio Tinto Group dropped 2.26 percent to A$71.85. The London Metal Exchange Index, a measure of six metals including copper and zinc, dropped 1 percent yesterday, breaking a three-day winning streak. Korea Zinc Co. lost 1.4 percent to 216,500 won. BHP Billiton Ltd., the world’s largest mining company and Australia’s No. 1 oil producer, lost 2.5 percent to A$41.40.
Crude oil for January delivery dropped as much as 85 cents to $75.61 a barrel in electronic trading on the New York Mercantile Exchange. Prices, which are up 70 percent this year, are poised for a 0.1 percent weekly decline.
The MSCI Asia Pacific Index has rallied 72 percent from a more than five-year low on March 9 amid signs government stimulus measures are reviving global growth.
The gauge’s rally from its March low has outpaced gains of 63 percent by the S&P 500 and 56 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P and 16 times for the Stoxx.
Dubai Debt Concern
The advance in Asia stocks this week has come as Chinese manufacturing grew at the fastest pace in five years and amid optimism the region’s companies will be sheltered from losses related to Dubai World, which last week sought to restructure its debt. Dubai World is seeking to delay payments on less than half its liabilities, easing the potential damage to banks recovering from $1.7 trillion of losses and writedowns from the global crisis.
Goldman Sachs Group Inc., BNP Paribas, Citigroup Inc., UBS AG and Credit Suisse Group AG this week forecast that Asian stocks ex-Japan will rally again in 2010. Goldman Sachs is the most bullish, predicting that the MSCI Asia excluding Japan Index will rise to 650, a 35 percent advance from the current level.
Sony Corp. rose 1.2 percent to 2,505 yen following a 6 percent gain yesterday. The Japanese electronics maker saw “very positive signs” for sales of TVs, personal computers, PlayStation 3 game consoles and Blu-ray discs during the U.S. Thanksgiving week, Chairman Howard Stringer said yesterday.
Gold Declines
The MSCI Emerging Markets Asia Index was little changed, on course for its biggest weekly gain since the five days ended May 8, after economic data from China to India signaled that growth in developing nations will be sustained.
Gold for immediate delivery dropped for a second day, paring a weekly advance, on speculation that signs of a slowing recovery will power the dollar and as record prices deter investors.
“The dollar’s rebound is knocking some wind out of commodities,” Chung Soon Oh, a trader with Hyundai Futures Co. in Seoul, said. “Investors are also increasingly tempted to pocket profits after gold climbed above $1,200 and as the year- end approaches.”
Gold fell 0.4 percent to $1,203.10 an ounce in Singapore. The price reached a record $1,226.56 an ounce yesterday and has gained 2.2 percent this week, heading for its fifth weekly increase.
South Korea’s Won
Copper for three-month delivery was little changed at $7,088.75 a metric ton after declining 0.3 percent to $7,061. Aluminum was down 0.5 percent at $2,122 a ton and zinc lost 0.2 percent to $2,405 a ton.
South Korea’s won rose, headed for its biggest weekly gain in seven months, as a government report today showed the economy expanded at a faster pace than initially estimated in the third quarter. It traded at 1,152.6 per dollar, headed for a weekly gain of 2 percent.
Gross domestic product increased 3.2 percent in the three months ended Sept. 30, more than the initial 2.9 percent estimate reported in October, the central bank said in Seoul today.
The yen and the dollar were little changed against the euro before the release of the U.S. jobless report.
The euro headed for a second weekly gain versus the dollar on prospects a European Central Bank official will signal the bank may take more steps toward reducing emergency stimulus. The yen was set for its biggest weekly loss against the euro since July 17 as Japanese stocks reversed earlier losses, and the government and the Bank of Japan took measures to weaken the currency.
The yen traded at 132.93 per euro in Tokyo from 132.87 in New York yesterday. Japan’s currency fetched 88.25 per dollar from 88.26. The dollar bought $1.5062 per euro from $1.5053.
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