Asian Stocks Slump Amid Concern Over China Growth, Ireland Debt

Nov. 17 （Bloomberg） -- Asian stocks fell for a fourth consecutive day, led by mining companies on concern China will take more steps to slow its economic growth and that Ireland’s debt crisis may worsen.

Rio Tinto Group, the world’s third-biggest mining company, dropped 2.9 percent in Sydney after oil and metal prices sank in New York. Mitsubishi Corp., Japan’s largest commodities trader, lost 1.9 percent in Tokyo. Billabong International Ltd., a surfwear maker that gets more than a fifth of its sales in Europe, retreated 3.3 percent in Sydney.

The MSCI Asia Pacific Index dropped 0.6 percent to 129.80 as of 9:27 a.m. in Tokyo, with almost five stocks declining for each that advanced. Material companies slumped the most among the gauge’s 10 industry groups after Chinese Premier Wen Jiabao said yesterday that the cabinet was drafting measures to counter the fastest inflation in two years.

“China coming back with tightening talk is making the market nervous again,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors Ltd., which manages about $85 billion. “All the fears are back over China going too far, and what that will do to growth in the region. It’s giving investors the excuse to lock in profits.”

Japan’s Nikkei 225 Stock Average fell 0.7 percent. Australia’s S&P/ASX 200 Index declined 1.6 percent and New Zealand’s NZX 50 Index decreased 0.9 percent in Wellington.

Futures on the Standard & Poor’s 500 Index gained 0.3 percent today. The index decreased 1.6 percent yesterday in New York, the most since Aug. 19.

Oil, Metals

Crude oil for December delivery dropped 3 percent yesterday in New York to $82.34 a barrel, the lowest settlement price since Oct. 29. Copper futures for March delivery tumbled 4.9 percent yesterday, the biggest drop since June 29. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum plunged 6.3 percent yesterday.

“Pressure to sell stocks, mainly commodity-related shares, will increase,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. “There are worries demand will decrease on China’s tightening policies.”

Ireland is in talks with European and International Monetary Fund officials about a bailout that would enable the country to inject capital into the country’s banks, said a European official with direct knowledge of the talks.

The MSCI Asia Pacific Index increased 8.5 percent this year through yesterday, compared with gains of 5.7 percent by the S&P 500 and 4.8 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 14.4 times estimated earnings, compared with 13.9 times for the S&P 500 and 12 times for the Stoxx 600.

--With assistance from Akiko Ikeda and Satoshi Kawano in Tokyo. Editors: Nicolas Johnson, Sam Waite.