Tokyo/Singapore: The markets dropped for a second day, led by companies that sell to the US after consumer confidence and home prices declined in the region’s largest export market.
Toyota Motor Corp., which made about a third of fiscal 2006 revenue in the US and Canada, and Samsung Electronics Co. fell.
“Automakers and technology companies rely on sales in North America so the current uncertainty over the US economy is pushing the shares lower,’’ said Junichi Misawa, who oversees $655 million (Rs2,824 crore) at STB Asset Management Co. in Tokyo.
Inpex Holdings Inc. and Cnooc Ltd led energy producers higher after the oil price rose to a six-month high. Orient Corp. jumped the most in more than four years after shareholder Mizuho Financial Group Inc. prepared to announce a financial aid plan.
The Morgan Stanley Capital International Asia-Pacific Index lost 0.6% to 144.43 as of 5:43 pm in Tokyo, following a 0.6% drop yesterday.
In Japan, the Nikkei 225 Stock Average fell 0.6%, erasing gains of as much as 0.5%, while the broader Topix index slid 0.7%. Tokyo Electric Power Co. led declines in utilities after a document showed it will delay the completion of two nuclear reactors at a plant where it had an accident.
All other markets fell, apart from in China. India’s Sensitive Index slid 1.6%, the most in the region.
US stocks posted their steepest losses in two weeks as economic reports added to concern a housing crisis will dent growth. The Standard & Poor’s 500 Index slid 0.6%.
Toyota, Japan’s largest automaker, fell 1.4% to 7,620 yen. Samsung Electronics, which accounted for about 16% of South Korean exports last year, slid 1.4% to 572,000 won. Rinker Group Ltd., the biggest supplier of cement blocks in the US, lost 1.9% to A$17.58 in Australia.
Southeast Asian stocks fell too, with indexes in Singapore, Thailand and Indonesia dropping 1% or more, as investors grappled with higher oil prices and political tensions over Iran.
Singapore’s Straits Times Index tumbled 1.0%, retreating from a one-month high, DBS Group Holdings, Southeast Asia’s biggest bank, fell 2.8% to its lowest level in more than a week.
The selloff in DBS was sparked by news that the bank plans to form a multinational consortium to buy Korea Exchange Bank (KEB) from US fund Lone Star.
Indonesia’s index fell 1.06% a day after touching its highest level in more than a month and Thailand’s index had dropped 1.52% by 0912 GMT.
Malaysian shares lost 0.96% after nine straight sessions of gains and the Philippines’ key index lost 0.38%.
ABN Amro regional strategist Tham Mun Hon said investors in Asia were overly pessimistic, and should focus on the region’s strong fundamentals, such as strong export growth and slow inflation rates.
Tham added that investors would look at Federal Reserve Chairman Ben Bernanke’s congressional testimony later in the day for more clues on the health of the US economy.
Kelvin Wong, portfolio manager at DBS Asset Management, said the concerns over the US economy were largely exaggerated.
“The more serious concern is the tension in Iran,” Wong said. “If that escalates, plus concerns about (monetary policy) tightening in China and India, there’s very little in positive sentiment that the Fed could send to investors.”
In Singapore, banks and transport-related stocks led declines. United Overseas Bank, the city-state’s second-biggest bank, dropped 1.9%, and Oversea-Chinese Banking Corp., the smallest of the three banks, lost 1.7%.
Transport firms with exposure to crude oil prices fell, including Singapore Airlines, which slid 2.3% to a one-week low, taxi group ComfortDelgro, which lost 1.1%, and shipping firm Neptune Orient Lines, which dropped 0.6%.
In contrast, oil and gas refining and marketing firm Singapore Petroleum Co. Ltd rose nearly 3% to a six-month high, fuelled by hopes that rising oil prices would mean higher profit margins.
In Kuala Lumpur, plantation firm IOI Corp. fell 3.2% after hitting a record high on Tuesday.
Malaysian gambling group Genting Bhd dropped 1.3% after its Genting International unit said on Tuesday that it would buy sister firm Star Cruises’ 25% stake in their joint Singapore casino project for S$255 million ($168 million).