Asian stocks declined, dragging the MSCI Asia Pacific Index down by the most in three weeks, as raw-material prices fell and Hong Kong enacted measures to curtail property speculation.
Mitsubishi Corp., a trading company that gets 39 per cent of its sales from commodities, slumped 4.7 per cent. Sun Hung Kai Properties Ltd. sank 3.4 per cent in Hong Kong after the city tightened down-payment requirements for luxury homes. LG Innotek Co., a maker of mobile-phone components, lost 8 per cent in Seoul after Credit Suisse Group AG downgraded the stock.
The MSCI Asia Pacific Index dropped 1.5 per cent to 118.03 in Tokyo, set for the biggest slump since Oct. 2. The gauge has climbed 67 per cent from a five-year low on March 9 amid signs government measures were helping the global economy out of its worst slump since World War II.
``We're at a turning point'' said Diane Lin, a Sydney-based fund manager at Pengana Capital. ``The stimulus has been helpful in pulling economies out of recession, but markets have been taking it for granted that this will continue.''
Japan's Nikkei 225 Stock Average declined 1.5 per cent. Consumer lenders Aiful Corp. and Promise Co. lost more than 5 per cent after an industry group said about 50 per cent of customers may be rejected for additional loans.
Australia's S&P/ASX 200 Index declined 1.2 per cent. James Hardie Industries NV, the No. 1 seller of home siding in the US, fell 4 per cent as US senators discussed cutting a tax credit for homebuyers. The Kospi Index lost 1 per cent in Seoul.
Futures on the Standard & Poor's 500 Index lost 0.2 per cent. The US gauge declined 1.2 per cent yesterday, led by financial companies after Richard Bove, a Rochdale Securities LLC analyst, said the government will force Bank of America to raise more capital before repaying the Troubled Asset Relief Program.
Mitsubishi, Japan's biggest trading house, dropped 4.7 per cent to 1,977 yen. Woodside Petroleum Ltd. retreated 2.5 per cent to $49.57 in Sydney. BHP Billiton, the world's biggest mining company, fell 1.8 per cent to A$US39.02.
Crude oil for December delivery lost 2.3 per cent to $US78.68 a barrel in New York yesterday, the biggest drop since Sept. 24. Copper futures fell 0.8 per cent, declining from the highest level in almost 13 months.
Sun Hung Kai Properties, Hong Kong's No. 1 property developer by market value, dropped 3.4 per cent to $HK118.20. Cheung Kong (Holdings) Ltd., the second biggest, slid 2.8 per cent to $HK102.60.
Down payments for homes priced above $HK20 million ($2.8 million) will be raised to 40 per cent from 30 per cent, Hong Kong Monetary Authority Chief Executive Norman Chan said.
LG Innotek dropped 8 per cent to 115,500 won, set for the lowest close in three weeks. Credit Suisse cut its rating on the stock to ``underperform'' from ``neutral.''
The MSCI Asia Pacific Index has risen 32 per cent this year, set for the biggest annual gain since 2003. Stocks in the benchmark are valued at 23 times estimated earnings for this year, higher than 17 times for the S&P 500 and 15 times for Europe's Dow Jones Stoxx 600 Index, according to Bloomberg data.
``There is doubt as to whether the current outlook for profit growth next year can justify current valuations,'' said Hideo Arimura, a senior fund manager at Mizuho Asset Management Co., which oversees the equivalent of $US35 billion in Tokyo.
Aiful, Acom
Japanese consumer lenders fell after the Japan Financial Services Association said yesterday that half of the companies' borrowers may be rejected for additional loans as new regulations providing a ceiling on loans are implemented.
Aiful declined 6.3 per cent to 134 yen in Tokyo, while rival Promise slipped 5.8 per cent to 580 yen. Acom Co. slid 8.6 per cent to 1,172 yen, adding to yesterday's 4 per cent drop, after the company said on Oct. 23 that first-half earnings were 85 per cent lower than its forecast.
James Hardie retreated 4 per cent to $7.02 in Sydney, set for the steepest drop in three weeks. Shares of US homebuilders slumped yesterday as senate leaders negotiated to extend and gradually reduce the housing tax credit through 2010.