Oct. 18 (Bloomberg) -- Asian stocks fell after completing a seventh weekly advance last week, with materials companies dropping after BHP Billiton Ltd. and Rio Tinto Group scrapped a plan to create the world’s largest iron ore producer.
BHP sank 1.3 percent as commodity prices also fell. Cnooc Ltd., China’s biggest offshore oil producer, dropped 1.8 percent in Hong Kong. HSBC Holdings Plc, which gets 30 percent of its revenue from the Asia Pacific, dropped 2.1 percent after five Taiwanese banks sued it. Mazda Motor Corp. dropped 0.9 percent in Tokyo after Nikkei English News reported Ford Motor Co. may lower its stake in the company.
The MSCI Asia Pacific Index declined 0.7 percent to 130.18 as of 1:31 p.m. in Tokyo today after reaching its highest level since July 2008 last week. About five stocks fell for every three that rose on the nearly 1,000-member gauge, which increased as much as 0.2 percent earlier. The measure completed its seventh weekly advance last week, the longest winning streak since 2006.
“After such a run-up in risk assets, the market was vulnerable to a correction,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which manages $85 billion. “A lot of the potential good news has been factored in and investors may be thinking it’s not a bad time to take profits.”
Japan’s Nikkei 225 Stock Average was little changed. South Korea’s Kospi Index fell 1.2 percent. Australia’s S&P/ASX 200 Index slid 1 percent, while New Zealand’s NZX 50 Index advanced 0.2 percent in Wellington. The Hang Seng Index fell 1 percent, its steepest drop in almost three weeks.
Technology Shares
Futures on the Standard & Poor’s 500 Index retreated 0.6 percent. The U.S. index rose 0.2 percent on Oct. 15 in New York as companies such as Google Inc. fueled a rally in technology shares that helped offset a decline in bank shares and an unexpected drop in consumer confidence.
BHP Billiton slipped 1.3 percent to A$41.09 after abandoning a plan with Rio Tinto Group to create the world’s largest iron-ore exporter, following opposition from regulators in Europe and Asia. Rio slipped 0.7 percent to A$82.65.
Crude oil for November delivery declined 1.7 percent on Oct. 15 in New York to $81.25 a barrel, the lowest settlement this month. The London Metal Exchange Index of six metals including aluminum and copper slipped 0.4 percent on Oct. 15, the biggest drop since Oct. 7.
Newcrest Mining Ltd., Australia’s largest gold producer, slumped 3 percent to A$40.82 as gold futures fell for a second day, the first two-day decline since July.
Commodity Producers
In Hong Kong, Cnooc, China’s biggest offshore oil producer, sank 1.8 percent to HK$16.10, while PetroChina Co. slid 2 percent to HK$9.90. Zijin Mining Group Co., China’s largest gold producer, dropped 3.8 percent to HK$7.53 after the company said it faces legal claims in connection with a deadly dam collapse at a mine.
The MSCI Asia Pacific Index has risen 8.2 percent this year on speculation growth in corporate profits will weather Europe’s debt crisis, Chinese steps to curb property-price inflation and concern about the pace of the U.S. economic rebound. Stocks in the gauge trade at 14.3 times estimated profit on average, compared with 14 times for the S&P 500 and 12.2 times for the Stoxx Europe 600 Index.
‘Policy Stimulus’
Investors are waiting to see “what’s coming in the way of policy stimulus in the U.S. and elsewhere,” said Stephen Halmarick, who helps manage about $135 billion as head of investment markets research at Colonial First State Global Asset Management in Sydney.
Bank stocks across the region fell, led by HSBC, which sank 2.1 percent to HK$81.15 in Hong Kong after five Taiwanese lenders sued it over its role in an alleged fraud they say cost them more than $500 million in damages. China Construction Bank Corp., the country’s second-largest lender, retreated 1.1 percent to HK$7.36.
“One area to avoid at the moment would be mainland Chinese banks due to their valuations,” said Castor Pang, research director at Cinda International Holdings Ltd. “In a volatile market, funds tend to make their way into the financial sector so once a correction takes place, money pulls out first from this sector.”
Industrial Bank of Korea, South Korea’s largest lender to small-and medium-sized companies, sank 3.5 percent to 16,600 won in Seoul. In Sydney, National Australia Bank Ltd., the nation’s biggest business lender, lost 1.1 percent to A$25.20.
Mazda dropped 0.9 percent to 212 yen in Tokyo after the Nikkei English News report on Ford’s move to reduce its stake. The shares pared declines after Sumitomo Mitsui Financial Group Inc.’s chairman, Masayuki Oku, said the Japanese company will become Mazda’s largest shareholder by the end of the year.