Asian key index falls to lowest in nearly 2 years

By Chen Shiyin  |   2008-8-6  |     NEWSPAPER EDITION

ASIAN stocks fell for a third day yesterday, sending the region's benchmark index to the lowest in almost two years, after a slump in raw-material prices dragged down commodity producers.

BHP Billiton Ltd, the world's largest mining company and Australia's No. 1 oil producer, dropped as copper plunged to the lowest level in six months and crude traded near US$120 a barrel. Posco paced losses among steel makers on speculation demand will wane. HSBC Holdings Plc retreated the most in three weeks in Hong Kong after the steepest earnings decline since 2001 and Chairman Stephen Green said emerging markets will see slower growth, according to Bloomberg News.

"Commodities prices have hit a choking point," said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about US$108 billion. "With further evidence of slowing growth there will be ongoing pressure on mining and resources stocks."

The MSCI Asia-Pacific Index slipped 0.9 percent to 127.37 as of 7:27pm in Tokyo. Measures tracking energy and mining companies had the biggest declines among the 10 industry groups in the benchmark index, which lost 2.9 percent the previous two days.

Japan's Nikkei 225 Stock Average declined 0.1 percent to 12,914.66.

HSBC's net income for the six months ended on June 30 plunged 29 percent from a year earlier to US$7.7 billion, the bank said on Monday. The outlook is "highly challenging," Green said. The shares lost 2.2 percent to HK$126.60 (US$16.22) in Hong Kong, the biggest drop since July 15.

BHP dropped 6.6 percent to A$35.82 (US$33).