Asian stocks drop on US cues

Asian stocks dropped for a fourth day after increases in U.S. jobs and wages damped speculation interest rates will be cut in the region's biggest export market Samsung Electronics Co and Hon Hai Precision Industry Co fell.

The US data is ``taking some of the glitter out of the share market,'' said Hans Kunnen, who helps oversee $70 billion at Colonial First State in Sydney.

``The nirvana scenario for share investors was for a U.S. interest rate cut early this year, but the reports suggest that may not happen quite so soon.''

Bank of China fell after regulators raised the amount of money banks must set aside as reserves, in an attempt to curb loan growth. BHP Billiton led a slide in mining stocks after commodities prices dropped to the lowest in almost two years.

The Morgan Stanley Capital International Asia-Pacific ex-Japan Index fell 1.2 percent to 387.31 as of 6 p.m. in Hong Kong as all 10 industry groups declined.

China, Pakistan and Thailand were the region's only markets to advance, while Japan was closed for a national holiday.

Hong Kong's Hang Seng fell 0.9 percent. Bank of China and China Construction Bank led declines after the People's Bank of China ordered to set aside more money as reserves for the fourth time in seven months to absorb excess funds from the financial system and prevent a rebound in loans and investments.

Bank of China, the nation's second-biggest bank, fell 3 percent to HK$4.19. China Construction, the No. 4 lender, lost 3.4 percent to HK$4.89. China Merchants Bank Co., the most profitable, dropped 3.4 percent to HK$16.14.

Declines in Hong Kong were limited after the city's inter-bank lending rate fell, boosting speculation that local banks will cut mortgage rates. Cheung Kong Holdings Ltd. led gains by shares of developers.

The Reuters/Jefferies CRB index of 19 commodities fell 1.2 per cent, the lowest since Feb. 2005.

A measure of six metals traded on the London Metal Exchange, including copper and zinc, dropped 2.8 percent. Copper lost 2.8 percent, zinc slumped 4.3 per cent and nickel fell 3.2 percent.

The MSCI Asia-Pacific excluding Japan Telecommunications Services Index surged 22 percent in the fourth quarter, the biggest gain among the 10 industry groups that make up the broader benchmark.

US stock-index futures advanced. International Business Machines Corp., the world's biggest computer-services provider, gained in Europe after UBS AG recommended the shares on earnings prospects.

EMC Corp. and Network Appliance Inc also gained after UBS upgraded the stocks and raised its price estimate for the shares. ``There could be surprises to the upside from companies,'' said Juergen Lukasser, who helps manage $20 billion as head of equities at Constantia Privatbank AG in Vienna.

"Blue-chip technology stocks have been doing quite well. There's some potential'' for more gains. Houston Exploration Co, a natural gas driller, jumped after agreeing to be acquired by Forest Oil Corp. for $1.5 billion.

General Electric Co., the second-biggest company by market value, was little changed on plans to buy Vetco Gray Inc. for $1.9 billion. Standard & Poor's 500 Index futures expiring in March added 2.7 to 1419.10 as of 9:15 a.m. inLondon.

Dow Jones Industrial Average futures gained 16 to 12,466 and Nasdaq-100 Index futures increased 3 to 1800.25.

Stocks fell in the U.S. in the year's first week of trading on concern that profit forecasts are too optimistic and as a drop in metals prices weighed on commodity shares.