Asian Material, Consumer Stocks Fall on Obama ‘Crisis’ Comments

Feb. 10 (Bloomberg) -- Asian material and consumer stocks fell after President Barack Obama said the U.S. faces a “full- blown crisis.” Utility companies gained as oil traded near a three-week low.

BHP Billiton Ltd., the world’s biggest mining company, dropped 0.4 percent in Sydney. Tohoku Electric Power Co. advanced 1.2 percent in Tokyo, pacing gains among utility stocks, on speculation fuel costs will drop. Nissan Motor Co., Japan’s third-largest carmaker, jumped 7.3 percent after saying it will cut 20,000 jobs.

“It’s going to take a lot of money and a lot of time for the U.S. economy to emerge from these depression-like conditions,” said Ben Pedley, Hong Kong-based managing director of LGT Investment Management Ltd., whose parent manages more than $18 billion. “It’s certainly going to help the companies if they cut costs but it’s not going to do anything to affect demand for their products.”

About five stocks rose for every four that fell on the MSCI Asia Pacific Index, which was little changed at 83.29 at 12:08 a.m. in Tokyo. The gauge has fallen 7 percent this year, extending 2008’s record 43 percent decline as the world’s biggest economies sank into recession.

Japan’s Nikkei 225 Stock Average added 0.2 percent to 7,984.54. Australia’s S&P/ASX 200 Index slipped 0.9 percent. China’s Shanghai Composite Index gained 0.9 percent.

IOOF Holdings Ltd. and Australian Wealth Management Ltd., asset managers that agreed to merge last year, slumped more than 5 percent after saying funds under management plunged. Orix Corp., Japan’s biggest non-bank financial company, plunged 10 percent after slashing its profit forecast.

Policy Action

Futures on the Standard & Poor’s 500 Index dropped 0.7 percent after Obama’s comments, which were made at a news conference just hours after the Senate held a procedural vote that cleared the way for passage of its stimulus bill tomorrow. The S&P 500 added 0.2 percent yesterday.

Governments around the world are stepping up efforts to ease the crisis that the International Monetary Fund predicts will cause global growth to almost grind to a halt this year. The U.S. needs government action now to put people back to work, Obama said.

“The announcement of the U.S. financial plan is the biggest event,” Mamoru Shimode, Tokyo-based equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television.

Stock declines in the past year have dragged the average valuation of companies on the MSCI Asia Pacific Index down by 13 percent to 13 times reported profit, as more signs emerged the global financial crisis was hurting corporate earnings.