Sept. 27 (Bloomberg) — Asian stocks dropped on concern record oil prices will slow global economic growth and corporate profits. Exporters such as Toyota Motor Corp. and airlines including Cathay Pacific Airways Ltd. led declines.
Morgan Stanley Capital International’s Asia-Pacific Index, which tracks the performance of about 900 stocks, lost 0.5 percent to 87.93 at 2:19 p.m. in Tokyo. Japan’s Topix index lost 0.7 percent to 1094.75, with automakers accounting for 14 percent of the slide. Hong Kong’s Hang Seng Index shed 1.2 percent.
“The oil price eventually eats into just about every company’s bottom line sooner or later,” said Ric Ronge, who helps manage $1.4 billion at Invesco Asset Management in Melbourne. “The longer the oil price stays up, the more widespread the affects become.”
Stock benchmarks fell in all markets except those in Singapore, New Zealand and India. South Korea’s stock market is shut through Sept. 29 for national holidays.
Crude-oil futures for November delivery rose to $49.26 a barrel in after-hours trading. The contract jumped 7.2 percent last week to settle at $48.88 on Sept. 24, the highest closing price since oil futures started trading on the New York Mercantile Exchange in 1983.
Energy Costs
Japan’s Topix and the Nikkei 225 Stock Average both slid more than 10 percent this quarter in dollar terms, the biggest declines among 60 indexes tracked by Bloomberg News worldwide. The benchmarks fell amid concern higher energy costs will stifle economic growth in the U.S. and derail a recovery at home.
Toyota, the world’s biggest automaker by value, shed 1.2 percent to 4,100 yen. The company gets 80 percent of its operating profit in North America. Nissan Motor Co., Japan’s second-largest automaker by vehicle sales, shed 1.7 percent to 1,183 yen.
Taiwan Semiconductor Manufacturing Co., the world’s largest supplier of made-to-order chips, slid 2.3 percent to NT$42.70. Hong Kong’s Li & Fung Ltd., which buys Asian-made clothing for U.S. clients including Abercrombie & Fitch Co., dropped 2.2 percent to HK$11.40.
An index of leading U.S. economic indicators fell for a third consecutive month in August, the longest streak since early 2003, according to a report released Sept. 23 by the New York-based Conference Board.
“We’re already seeing some impact of higher oil prices in the U.S.,” said Alex Wong, a director at Rexcapital Asset Management Ltd. His Rexcapital Asian Pacific Fund rose 9.5 percent in the year through July 31, according to Bloomberg data, compared with a 0.1 percent drop in the MSCI Asia-Pacific Index.
The Japanese central bank’s quarterly Tankan survey due Oct. 1 may also show confidence among large manufacturers had the smallest improvement in more than a year, according to a Bloomberg survey of economists. The Tankan is the nation’s most closely watched gauge of business confidence.
Airlines
Cathay Pacific, Asia’s sixth-biggest airline by sales, lost 0.8 percent to HK$13.20. The company last month reported first- half earnings that missed some analysts’ expectations as the airline’s fuel bill climbed.
Japan Airlines Corp., Asia’s largest carrier by sales, lost 2.6 percent to 303 yen. The company has said it may lose 18 billion yen ($163 million) from pretax profit from operations, if the average price of jet fuel remains at $40 a barrel this year.
All Nippon Airways Co., Japan’s biggest domestic carrier, slumped 2.2 percent to 358 yen. China Southern Airlines Co., the nation’s largest carrier, shed 1.8 percent to HK$2.775 in Hong Kong. China Airlines, Taiwan’s largest carrier, slid 1.8 percent to NT$16.70.
Higher crude prices may raise costs at airlines, which garner about a fifth of their expenses from jet fuel. The price of jet fuel has risen 54 percent this year to $59.23 a barrel, according to oil-pricing service Platts.
The Bloomberg Asia Pacific Airlines Index, which tracks 14 stocks, fell 1.2 percent, taking its decline in the past six months to 7.7 percent.
Oil Producers
Oil producers such as PetroChina Co. and Woodside Petroleum Ltd. advanced on optimism of higher earnings.
PetroChina, China’s biggest oil producer, rose 0.6 percent to HK$4.050. China Petroleum & Chemical Corp., China’s second largest, added 1.9 percent to HK$4.82.
Woodside, Australia’s second-biggest oil producer, climbed 2.3 percent to A$19.75, set to close at a record. Santos Ltd., the country’s third-biggest producer, added 0.7 percent to A$7.20.
“We’re happy with holding on to our oil stocks for the time being,” said Invesco Asset’s Ronge, who holds Woodside shares.
