Asian stocks fall to 7-week low

STOCK REPORT

Asian stocks fell the most in seven weeks, led by Inpex Holdings Inc and BHP Billiton as oil traded near an 18-month low and zinc prices tumbled.

"Commodities have struggled to maintain their previous performances," said Jason Teh, who helps manage the equivalent of $4.3 billion at Investors Mutual Ltd in Sydney. "A turnaround for resources shares may be a lot further off."

Shares also dropped as investors reduced holdings in emerging markets after Venezuela pledged to nationalise its utilities and Thailand toughened rules to cap foreign ownership of local companies.

The Morgan Stanley Capital International Asia-Pacific Index lost 1.6 per cent to 137.25 as of 7:30 pm in Tokyo, its biggest loss since November 20. All 10 industry groups fell, with measures of energy and raw materials stocks declining the most.

Japan's Nikkei 225 Stock Average and the broader Topix index both lost 1.7 percent. Indonesia's stock index dropped the most in the region, led by PT Telekomunikasi Indonesia. All other markets fell, except China, New Zealand, Thailand and Sri Lanka.

Inpex, Japan's biggest oil explorer, declined 2.1 per cent to 909,000 yen. Woodside Petroleum, Australia's second-biggest oil producer, dropped 2.3 per cent to A$35.30. Nippon Oil, Japan's biggest petroleum refiner, slumped 4 per cent to 772 yen.

Crude oil for February delivery fell 0.8 per cent to $55.64 a barrel, the lowest close since June 15, 2005. Oil was recently at $55.08 in after-hours trading. BHP, the world's biggest mining company by market value and production, dropped 2.8 per cent to A$24.01.

Zinifex Ltd, the No. 2 zinc producer, lost 5.5 per cent to A$16.18. Metals including lead and nickel fell on the London Metals exchange yesterday. Zinc tumbled 5.4 per cent, the most in four months.

A five-year boom in prices of industrial metals, such as copper and zinc, is set to end in 2007 as the pace of supply growth rises, analysts at ABN Amro Holding NV said in a report.

The MSCI Emerging Markets Index on Wednesday fell 1.3 per cent, its sixth straight day of losses and its longest losing streak since a 10-day slump ending May 22 that erased 15 per cent of the gauge.

Thailand's SET Index rose 0.9 per cent, after slumping 2.7 per cent yesterday. The country said it may adjust deadlines for foreign investors and their nominees to reduce stakes in local companies, a day after the rule changes caused the benchmark stock index to fall to a two-year low.

Europe
European stocks declined, led by energy and telecommunications companies, after oil dropped for a third day and Vodafone Group Plc said it's close to making an acquisition of an Indian company worth an estimated $18 billion.

The Dow Jones Stoxx 600 Index fell 0.7 per cent to 363.69 at 1:38 pm in London. All 18 industry groups of the benchmark declined except the measure for healthcare companies. The Stoxx 50 decreased 0.8 per cent. The Euro Stoxx 50, a measure for the 13 nations sharing the euro, slid 0.9 per cent.

National benchmarks fell in all of the 18 western European markets. The UK's FTSE 100 slipped 0.5 per cent, Germany's DAX slid 0.7 per cent. France's CAC 40 lost 0.6 per cent.