Asian stocks fall on oil prices and slow growth

By Chen Shiyin  |   2008-7-5  |     NEWSPAPER EDITION

MOST Asian stocks fell yesterday, sending the region's benchmark index lower for a fourth week, as record oil and slowing growth dent profits. Japan's Nikkei 225 Stock Average dropped for a 12th day, the longest losing streak in 54 years.

Kyushu Electric Power Co led power producers lower after oil rose above US$145 a barrel. Bumiputra-Commerce Holdings Bhd paced declines in Malaysia as UBS AG cut its forecast for banks' profits, citing higher consumer prices and weaker growth. Reliance Communications Ltd jumped after a newspaper report said the Indian mobile-phone operator plans to raise as much as US$6 billion to buy Africa's MTN Group Ltd.

"It's going to be a difficult second half unless we get a sharp fall in the oil price," said Lim Kok Boon, Singapore-based chief investment officer at Fortis Private Banking.ion "There's going to be a lot of pain."

The MSCI Asia-Pacific Index added 0.1 percent to 132.74 at 7:07pm Tokyo time. The measure earlier dropped to 131.97, which would be the lowest close since November 2006. The index completed a four-week, 12-percent slide, the longest losing streak since the period ended February 8, Blooomberg News said.

Japan's Nikkei 225 retreated 0.2 percent to 13,237.89, capping a 12-day, 8.4-percent-slump. That's the longest decline since 1954, when the end of the Korean War caused a slump in Japanese industrial sales to the United States military. Malaysia's Kuala Lumpur Composite Index dropped 1.7 percent after trading resumed following a one-day suspension because of a systems failure.

All Asian benchmark indexes fell this week, except Vietnam.

Kyushu Electric, Japan's fifth-largest power producer by market value, lost 0.9 percent to 2,190 yen (US$20.52). Tenaga Nasional Bhd, a Malaysian state-controlled power producer, fell 2.5 percent to 7.80 ringgit (US$2.39).

Crude oil rose 1.2 percent to US$145.29 a barrel on Thursday in New York and touched a record US$145.85 during the day. Futures have more than doubled from a year earlier, spurring finance ministers from the Group of Eight to say last month that surging food and fuel prices have replaced the credit squeeze as the biggest threat to the world economy.