Bloomberg News

Asian Stocks Record Longest Losing-Streak Since Lehman Collapse

June 03, 2011

June 4 (Bloomberg) -- Asian stocks fell, capping the biggest streak of weekly losses since the collapse of Lehman Brothers Holdings Inc. in 2008, as disappointing U.S. economic reports overshadowed optimism Europe’s debt crisis may be contained.

Toyota Motor Corp. paced declines among carmakers in Tokyo as U.S. sales slumped. BHP Billiton Ltd. dropped 2 percent in Sydney as metal prices sank in London. LG Electronics Inc., the world’s third-biggest maker of mobile phones, slid 5 percent in Seoul. Hyundai Heavy Industries Co., the world’s biggest shipbuilder, jumped 12 percent in Seoul after winning orders from Greece.

The MSCI Asia-Pacific Index declined 0.3 percent to 133.98 this week, its fifth straight drop, as reports showed U.S. manufacturing expanded at the weakest pace in more than a year and employers hired fewer workers than forecast, exacerbating concern over the global impact of Europe’s sovereign debt crisis.

“The weak manufacturing and employment data have added to concerns about the strength of the global economy,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd., which manages about $98 billion in Sydney. “The roller- coaster in global and regional markets continues, and right now it’s back to risk-off.”

The decline over the past five days completes the MSCI Asia-Pacific Index’s biggest string of weekly losses since the gauge dropped for six consecutive weeks beginning September 2008, the month that Lehman Brothers’ bankruptcy helped precipitate a global financial crisis.

Aid to Greece

This week’s losses were limited by speculation that European officials will pledge more financial aid to Greece, potentially easing the region’s debt problems.

Japan’s Nikkei 225 Stock Average fell 0.3 percent this week and Australia’s S&P/ASX 200 Index sank 2.2 percent. South Korea’s Kospi index gained 0.6 percent, while Hong Kong’s Hang Seng index slid 1.3 percent.

Toyota and Honda Motor Co. led declines among Japanese carmakers in Tokyo as industry-wide U.S. auto sales fell to 1.06 million cars and light trucks last month from 1.1 million a year earlier, according to a report from Autodata Corp.

Toyota and Honda, the automakers hardest hit by Japan’s record earthquake in March, led U.S. sales declines among Asian- based car manufacturers in May as supplies of some models ran low, the report showed.

Japanese Carmakers

Toyota, the world’s biggest carmaker, decreased 3.2 percent to 3,230 yen this week. Honda Motor Co. which gets about 44 percent of sales from North America, dropped 1.6 percent to 3,020 yen. Nissan Motor Co., Japan’s No. 3 automaker by market value, sank 2.9 percent to 773 yen.

The U.S. Institute for Supply Management’s factory index fell last month to its lowest level since September 2009, while companies added jobs at the slowest pace since September. Employment grew by 38,000 in May, data from ADP Employer Services showed this week, missing a 175,000 median estimate of economists surveyed by Bloomberg.

Separately, a government report showed more Americans than forecast filed applications for unemployment benefits last week.

“The global economy has hit a soft patch and more investors are shying away from risk assets.” said Mitsushige Akino, who oversees the equivalent of $600 million at Ichiyoshi Investment Management Co. in Tokyo.

‘Soft Patch’

BHP dropped 2 percent to A$43.23 in Sydney as the London Metal Exchange Index of prices for six metals, including copper and aluminum, slid 1.03 percent this week. Rio Tinto Group, the world’s second-biggest mining company by sales, fell 1.2 percent to A$79.76. Jiangxi Copper Co., China’s No. 1 producer of the metal, slipped 1.15 percent to HK$25.80 in Hong Kong.

In Seoul, LG Electronics fell 5 percent to 93,100 won after the company said a recovery at its handset business may take longer than some analysts expect.

Hyundai Heavy surged 12 percent to 506,000 won this week in Seoul after winning an order for two liquefied natural gas tankers from Dynagas Ltd. of Greece.

The euro advanced against the Japanese currency this week amid signs the region’s debt crisis may ease after Jean-Claude Juncker, head of the region’s finance ministers’ group, said European Union leaders will decide on additional aid for Greece by the end of June.

Officials from the EU and the International Monetary Fund undertook a review of Greece’s plan for 78 billion euros ($113 billion) in asset sales and austerity measures as they prepare the nation’s second bailout in little more than a year.

Their assessment capped a week in which Greece’s fiscal crisis worsened enough for Moody’s Investors Service to raise the probability of a default to 50 percent.

“While stock valuations are looking attractive, we’re still cautious as global growth is slowing,” said Diane Lin, a Sydney-based fund manager at Pengana Capital Ltd., which has about $1 billion of assets. “Europe’s situation is still very difficult.”

--With assistance from Norie Kuboyama and Satoshi Kawano in Tokyo, and Jonathan Burgos in Singapore. Editors: Jason Clenfield, Paul Tighe

To contact the reporter on this story: Shani Raja in Sydney at

To contact the editor responsible for this story: Nick Gentle at

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