Asian Stocks Drop on Commodities, Bank Loss Concern; Rio Slumps

April 7 (Bloomberg) -- Asian stocks fell for the first time in five days, led by mining and bank shares, on lower commodity prices and concern loan losses will swell at financial companies.

Rio Tinto Group, the world’s third-largest mining company, slumped 9.2 percent in Sydney on speculation of a share sale. Mizuho Financial Group Inc., which invested $1.2 billion in Merrill Lynch & Co., sank 2 percent, after Mike Mayo, an analyst at Calyon Securities, said U.S. banks’ loan losses may exceed Great Depression levels. Telstra Corp., Australia’s largest phone company, rose 2.2 percent on a government plan to build a high-speed Internet network.

The MSCI Asia Pacific Index lost 0.3 percent to 86.83 at 9:09 a.m. in Tokyo, following a four-day, 7.6 percent advance that took valuations to the highest since Nov. 30, 2007. Through yesterday, the gauge surged 23 percent from a more than five- year low reached on March 9, amid speculation governments worldwide will succeed in efforts to revive growth.

“The rally got a bit ahead of itself,” said Hugh Dive, who helps manage about $3 billion a Investors Mutual Ltd. in Sydney. “When you ask companies if they can see any light at the end of the tunnel, the answer is still no.”

Japan’s Nikkei 225 Stock Average slipped 0.6 percent to 8,805.64. Australia’s S&P/ASX 200 Index fell 1.2 percent. All markets open for trading declined.

Futures on the Standard & Poor’s 500 Index dropped 0.1 percent. The gauge slid 0.8 percent yesterday, led by financial companies. Mayo recommended selling U.S. bank shares, saying that government actions “might not help as much as expected.”

Rio Tinto Group, the world’s third-largest mining company, tumbled 9.2 percent to A$53.67, extending yesterday’s 2.2 percent drop. The company has made plans for an $8 billion share sale in case its accord for an investment in Aluminum Corp. of China falls through, the Sunday Times reported this week without citing anyone.

Rising Valuation

BHP Billiton Ltd., the world’s biggest mining company, slumped 3.2 percent to A$32.90. Crude oil for May delivery dropped 2.8 percent to settle at $51.05 a barrel in New York yesterday, while copper slumped 2.1 percent for the first drop in five days. Gold slid 2.7 percent.

The stock rally in the past month had lifted the average valuation of companies on the MSCI Asia Pacific Index yesterday to 18 times reported profit, the highest since Nov. 30, 2007, data compiled by Bloomberg show.

Finance stocks, which accounted for 36 percent of the drop today, are the worst performers of 10 industry groups on the MSCI Asia Pacific Index in the past year as losses from the credit crisis swelled to $1.29 trillion.

Mizuho dropped 2 percent to 200 yen. National Australia Bank Ltd. fell 2.6 percent to A$22.99.

Telstra rose 2.2 percent to A$3.28 after the Australian government said it will join with private partners to spend A$43 billion ($30.5 billion) over the next 8 years to build a high- speed Internet network.